Reviewing Pinnacle Bankshares (OTCMKTS:PPBN) and Cadence Bank (NYSE:CADE)

Cadence Bank (NYSE:CADE) and Pinnacle Bankshares (OTCMKTS:PPBN) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings for Cadence Bank and Pinnacle Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cadence Bank	0	9	2	0	2.18
Pinnacle Bankshares	0	0	0	0	0.00

Cadence Bank currently has a consensus price target of $42.33, suggesting a potential downside of 5.02%. Given Cadence Bank’s stronger consensus rating and higher probable upside, analysts clearly believe Cadence Bank is more favorable than Pinnacle Bankshares.

Risk & Volatility

Cadence Bank has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Pinnacle Bankshares has a beta of 0.28, meaning that its stock price is 72% less volatile than the S&P 500.

Dividends

Cadence Bank pays an annual dividend of $1.10 per share and has a dividend yield of 2.5%. Pinnacle Bankshares pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. Cadence Bank pays out 39.9% of its earnings in the form of a dividend. Pinnacle Bankshares pays out 23.1% 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. Cadence Bank has raised its dividend for 14 consecutive years. Pinnacle Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

84.6% of Cadence Bank shares are owned by institutional investors. Comparatively, 3.8% of Pinnacle Bankshares shares are owned by institutional investors. 2.2% of Cadence Bank shares are owned by company insiders. Comparatively, 6.5% of Pinnacle Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Cadence Bank and Pinnacle Bankshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cadence Bank	$2.90 billion	2.80	$523.60 million	$2.76	16.15
Pinnacle Bankshares	$55.62 million	1.79	$9.18 million	$4.84	9.24

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

Profitability

This table compares Cadence Bank and Pinnacle Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cadence Bank	18.15%	9.97%	1.13%
Pinnacle Bankshares	18.14%	12.94%	1.03%

Summary

Cadence Bank beats Pinnacle Bankshares on 12 of the 17 factors compared between the two stocks.

About Cadence Bank

Cadence Bank provides commercial banking and financial services. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company’s products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.

About Pinnacle Bankshares

Pinnacle Bankshares Corporation operates as the bank holding company for First National Bank that provides a range of commercial and retail banking products and services. The company accepts checking accounts, savings and time deposits, individual retirement accounts, certificates of deposit, and money market accounts. Its loan products include residential and commercial mortgage loans, home equity loans, consumer installment loans, agricultural loans, investment loans, small business loans, commercial lines of credit, and letters of credit. The company also provides credit cards; insurance products, including property and casualty, life, and health; investment and annuity products; and overdraft protection, merchant bankcard processing, cash management, remote deposit capture, night drop, safe deposit boxes, and notary services, as well as telephone, mobile, and online banking services. It operates branches in Amherst County, Bedford County, Campbell County, Pittsylvania County; and the city of Danville, Lynchburg and Charlottesville. The company was founded in 1908 and is headquartered in Altavista, Virginia.