Hancock Whitney (NASDAQ:HWC) and Towne Bank (NASDAQ:TOWN) Critical Analysis

Hancock Whitney (NASDAQ:HWC) and Towne Bank (NASDAQ:TOWN) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, valuation, dividends, profitability, earnings and institutional ownership.

Risk & Volatility

Hancock Whitney has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Towne Bank has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Dividends

Hancock Whitney pays an annual dividend of $1.80 per share and has a dividend yield of 2.9%. Towne Bank pays an annual dividend of $1.08 per share and has a dividend yield of 3.1%. Hancock Whitney pays out 33.1% of its earnings in the form of a dividend. Towne Bank pays out 47.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Hancock Whitney has raised its dividend for 3 consecutive years and Towne Bank has raised its dividend for 13 consecutive years. Towne Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Hancock Whitney and Towne Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hancock Whitney	0	1	6	1	3.00
Towne Bank	0	1	2	0	2.67

Hancock Whitney currently has a consensus target price of $70.00, indicating a potential upside of 12.00%. Towne Bank has a consensus target price of $41.00, indicating a potential upside of 19.08%. Given Towne Bank’s higher possible upside, analysts clearly believe Towne Bank is more favorable than Hancock Whitney.

Profitability

This table compares Hancock Whitney and Towne Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hancock Whitney	23.28%	11.21%	1.35%
Towne Bank	16.49%	8.99%	1.12%

Insider & Institutional Ownership

81.2% of Hancock Whitney shares are held by institutional investors. Comparatively, 56.0% of Towne Bank shares are held by institutional investors. 0.9% of Hancock Whitney shares are held by company insiders. Comparatively, 8.1% of Towne Bank shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Hancock Whitney and Towne Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hancock Whitney	$2.06 billion	2.57	$460.82 million	$5.43	11.51
Towne Bank	$1.03 billion	2.52	$161.76 million	$2.30	14.97

Hancock Whitney has higher revenue and earnings than Towne Bank. Hancock Whitney is trading at a lower price-to-earnings ratio than Towne Bank, indicating that it is currently the more affordable of the two stocks.

Summary

Hancock Whitney beats Towne Bank on 13 of the 18 factors compared between the two stocks.

About Hancock Whitney

Hancock Whitney Corporation operates as the financial holding company for Hancock Whitney Bank that provides traditional and online banking services to commercial, small business, and retail customers. It offers various transaction and savings deposit products consisting of brokered deposits, time deposits, and money market accounts; treasury management services, secured and unsecured loan products including revolving credit facilities, and letters of credit and similar financial guarantees; and trust and investment management services to retirement plans, corporations, and individuals, and investment advisory and brokerage products. The company also provides commercial and industrial loans including real and non-real estate loans; construction and land development loans; and residential mortgages, as well as consumer loans. In addition, it offers commercial finance products to middle market and corporate clients, including leases and related structures; facilitates investments in new market tax credit activities and holding certain foreclosed assets; provides customers access to fixed annuity and life insurance products; and underwriting transactions products, as well as debt and mortgage-related securities. The company was founded in 1899 and is headquartered in Gulfport, Mississippi.

About Towne Bank

TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals. The company operates through three segments: Banking, Realty, and Insurance. It accepts various deposits, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate acquisition, development, and construction loans. In addition, it provides other services, such as safe deposit boxes, treasury management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as online, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; investment and asset management services; commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options comprising alternative investments, annuities, margin accounts, convertible bonds, and pension and profit-sharing plans. Additionally, it provides residential real estate, relocation, property management, vacation rentals, and title and settlement services; and originates residential mortgage loans. The company also offers life, property, casualty, and vehicle insurance services; and employee benefit programs, such as health, dental, vision, and disability insurance. It operates in Richmond, Virginia, the Greater Hampton Roads region in southeastern Virginia, northeastern North Carolina, Raleigh, Charlotte, Greensboro, and Greenville, North Carolina. TowneBank was incorporated in 1998 and is based in Portsmouth, Virginia.