Cadence Bancorp (NYSE: CADE) and Flagstar Bancorp (NYSE:FBC) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, risk, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Institutional and Insider Ownership

9.0% of Cadence Bancorp shares are owned by institutional investors. Comparatively, 97.6% of Flagstar Bancorp shares are owned by institutional investors. 63.0% of Flagstar Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Cadence Bancorp and Flagstar Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cadence Bancorp 24.71% 9.66% 1.18%
Flagstar Bancorp 14.56% 9.77% 0.87%

Earnings and Valuation

This table compares Cadence Bancorp and Flagstar Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cadence Bancorp $423.65 million 4.90 $65.77 million N/A N/A
Flagstar Bancorp $904.00 million 2.38 $171.00 million $2.36 15.93

Flagstar Bancorp has higher revenue and earnings than Cadence Bancorp.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Cadence Bancorp and Flagstar Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cadence Bancorp 0 3 5 0 2.63
Flagstar Bancorp 0 1 6 0 2.86

Cadence Bancorp currently has a consensus price target of $25.57, indicating a potential upside of 3.07%. Flagstar Bancorp has a consensus price target of $39.17, indicating a potential upside of 4.19%. Given Flagstar Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Flagstar Bancorp is more favorable than Cadence Bancorp.

Summary

Flagstar Bancorp beats Cadence Bancorp on 8 of the 11 factors compared between the two stocks.

About Cadence Bancorp

Cadence Bancorporation is a bank holding company. The Company is focused on middle-market commercial lending, complemented by retail banking and wealth management services, and provides a broad range of banking services to businesses, individuals and business owners. It operates through three segments: Banking, Financial Services and Corporate. Banking Segment offers a range of deposit products and lending services through its Commercial Banking, Retail Banking and Private Banking business lines. Financial Services segment provides an integrated set of investment, retirement, estate, college and business succession planning, retail brokerage, personal and institutional trust services and insurance services through three product lines: Investment Management, Trust Services, and Insurance Services. The Corporate Segment reflects parent-only activities, including debt and capital raising, and intercompany eliminations.

About Flagstar Bancorp

Flagstar Bancorp, Inc. is a savings and loan holding company. The Company’s business is primarily conducted through its principal subsidiary, Flagstar Bank, FSB. It operates through four segments: Community Banking, Mortgage Originations, Mortgage Servicing, and Other. Through Mortgage Originations segment, it originates, acquires and sells one- to four-family residential mortgage loans. The Mortgage Servicing segment includes services and subservices mortgage loans, on a fee basis, for others. The Community Banking segment originates loans, provides deposits and fee based services to consumer, business and mortgage lending customers through its Branch Banking, Business and Commercial Banking, Government Banking, Warehouse Lending and Held-for-Investment Portfolio groups. It offers checking accounts, savings accounts, money market accounts, certificates of deposit and others. Other financial services include lines of credit, revolving credit, inventory and accounts receivable.

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