Comparing Veritex (VBTX) & Hilltop (HTH)

Veritex (NASDAQ:VBTX) and Hilltop (NYSE:HTH) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, profitability, institutional ownership, dividends, analyst recommendations and valuation.

Institutional & Insider Ownership

73.2% of Veritex shares are owned by institutional investors. Comparatively, 59.4% of Hilltop shares are owned by institutional investors. 4.7% of Veritex shares are owned by insiders. Comparatively, 22.3% of Hilltop shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.



Profitability

This table compares Veritex and Hilltop’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Veritex 23.12% 6.83% 1.11%
Hilltop 6.55% 7.00% 1.00%

Dividends

Hilltop pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. Veritex does not pay a dividend. Hilltop pays out 16.9% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations for Veritex and Hilltop, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Veritex 0 0 5 0 3.00
Hilltop 0 3 2 0 2.40

Veritex currently has a consensus price target of $34.50, suggesting a potential upside of 47.00%. Hilltop has a consensus price target of $25.75, suggesting a potential upside of 28.75%. Given Veritex’s stronger consensus rating and higher probable upside, analysts plainly believe Veritex is more favorable than Hilltop.

Risk & Volatility

Veritex has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500. Comparatively, Hilltop has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Valuation & Earnings

This table compares Veritex and Hilltop’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Veritex $87.13 million 6.50 $15.15 million $0.95 24.61
Hilltop $1.71 billion 1.10 $132.54 million $1.66 12.01

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

Summary

Veritex beats Hilltop on 10 of the 16 factors compared between the two stocks.

Veritex Company Profile

Veritex Holdings, Inc. operates as the holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals. The company's deposit products include checking, demand, savings, money market, and time deposit accounts, as well as commercial deposit and financial institution money market accounts. Its loan portfolio consists of commercial real estate and general commercial loans, residential real estate loans, construction and land loans, farmland loans, and consumer loans. The company also provides a range of online banking solutions, such as access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and ATMs, as well as banking through telephone, mail, and personal appointment. In addition, it offers debit cards, night depository services, direct deposits, cashier's checks, and letters of credit; treasury management services, including balance reporting, transfers between accounts, wire transfer initiation, automated clearinghouse origination, and stop payments; and cash management deposit products consisting of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts. The company operates through 20 branches and 1 mortgage office located in the Dallas-Fort Worth metroplex, as well as 1 branch in the Houston metropolitan area. Veritex Holdings, Inc. was founded in 2009 and is headquartered in Dallas, Texas.

Hilltop Company Profile

Hilltop Holdings Inc. provides banking and financial products and services. Its Banking segment offers savings, checking, interest-bearing checking, and money market accounts; certificates of deposit; lines and letters of credit, home improvement and equity loans, loans for purchasing and carrying securities, equipment loans and leases, agricultural and commercial real estate loans, and other loans; and commercial, industrial, and single family residential mortgage loans. This segment also provides term and construction finance; check cards and safe deposit boxes; treasury management, Internet banking, bill pay, overdraft, and automated teller machine services; and estate planning, management and administration, and investment portfolio management services, as well as employee benefit and individual retirement accounts. The company's Broker-Dealer segment advises on public finance; trades in and underwrites U.S. government and government agency bonds, corporate and municipal bonds, and structured products, as well as mortgage-backed and asset-backed securities; trades in equities and options; and provides asset and liability management advisory, structured asset and liability, commodity hedging advisory, equity trading, retail brokerage, clearing, and securities lending services. The company's Mortgage Origination segment offers mortgage, jumbo, Federal Housing Administration, Veteran Affairs, and United States Department of Agriculture loans. Its Insurance segment provides personal product line comprising homeowners, dwelling fire, manufactured home, flood, and vacant policies; and commercial lines, such as commercial multi-peril, builders risk, builders risk renovation, sports liability, and inland marine policies. The company operates in Texas, California, Florida, Ohio, Arizona, South Carolina, Washington, Missouri, Maryland, North Carolina, and other states in the United States. Hilltop Holdings Inc. was founded in 1998 and is headquartered in Dallas, Texas.

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