Head-to-head: Cadence Bank (NYSE: CADE) and Red River Bancshares (NASDAQ: RRBI)
Red River Bancshares (NASDAQ: RRBI – Get Rating) and Cadence Bank (NYSE: CADE – Get Rating) are both finance companies, but which is the best investment? We’ll compare the two companies based on earnings strength, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.
Red River Bancshares pays an annual dividend of $0.28 per share and has a dividend yield of 0.5%. Cadence Bank pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. Red River Bancshares pays 6.3% of its profits as a dividend. Cadence Bank pays 51.2% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Red River Bancshares increased its dividend for 1 consecutive year and Cadence Bank increased its dividend for 2 consecutive years. Cadence Bank is clearly the better dividend-paying stock, given its higher yield and longer track record of dividend growth.
Valuation and benefits
This table compares the revenue, earnings per share (EPS), and valuation of Red River Bancshares and Cadence Bank.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Red River Bancshares||$101.83 million||3.76||$32.95 million||$4.45||11.98|
|Cadence bank||$1.26 billion||2.20||$195.16 million||$1.72||14.81|
Cadence Bank has higher revenue and profit than Red River Bancshares. Red River Bancshares trades at a lower price-to-earnings ratio than Cadence Bank, indicating that it is currently the more affordable of the two stocks.
This table compares the net margins, return on equity and return on assets of Red River Bancshares and Cadence Bank.
|Net margins||Return on equity||return on assets|
|Red River Bancshares||32.19%||10.88%||1.06%|
Insider and Institutional Ownership
17.9% of shares in Red River Bancshares are held by institutional investors. By comparison, 71.0% of Cadence Bank’s shares are held by institutional investors. 22.5% of Red River Bancshares shares are held by insiders. By comparison, 2.2% of Cadence Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds, and large money managers believe a company is poised for long-term growth.
Volatility and risk
Red River Bancshares has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. By comparison, Cadence Bank has a beta of 1.05, indicating that its stock price stock is 5% more volatile than the S&P 500.
This is a breakdown of the current recommendations for Red River Bancshares and Cadence Bank, as reported by MarketBeat.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|Red River Bancshares||0||0||0||0||N / A|
Cadence Bank has a consensus price target of $37.50, suggesting a potential upside of 47.17%. Given Cadence Bank’s possible higher upside, analysts clearly believe that Cadence Bank is more favorable than Red River Bancshares.
Cadence Bank beats Red River Bancshares on 11 out of 17 factors compared between the two stocks.
Red River Bancshares Company Profile (Get a rating)
Red River Bancshares, Inc. operates as a bank holding company for Red River Bank which provides banking products and services to commercial and retail customers in Louisiana. The Company offers various deposit products, including checking, savings accounts, money market accounts and term deposits. It also offers commercial real estate loans; one to four family mortgages and home equity lines of credit; construction and development loans; commercial and industrial loans; Small Business Administration Paycheck Protection Program loans; tax-exempt loans; consumer loans to individuals for personal, family and household purposes, including secured and unsecured installment and term loans; housing mortgages; and lines of credit and stand-by letters of credit. In addition, the company provides cash management, private banking and brokerage; investment advice, financial planning and a range of retirement plans; debit and credit cards, direct deposits, cashier’s checks and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment and electronic delivery of customer statements; and in-person banking, through ATMs, drive-thru, overnight deposits, telephone, mail, mobile banking, and remote deposits. It operates a network of 27 banking centers throughout Louisiana and two combined loan and deposit origination offices in Lafayette and New Orleans, Louisiana. The company was incorporated in 1998 and is headquartered in Alexandria, Louisiana.
Cadence Bank Company Profile (Get a rating)
Cadence Bank provides commercial banking and financial services in the United States. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, corporate and business banking, cash management, specialty and asset-based lending, commercial real estate, equipment finance and correspondent banking. The Company’s products and services also include small business lending, foreign exchange, wealth management, investments and trusts, financial planning, pension plan management and insurance services to individuals and businesses. As of March 3, 2022, it operated approximately 400 branches in the South, Midwest and Texas. The company was incorporated in 1876 and is based in Tupelo, Mississippi.
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