Comparing Cullen/Frost Bankers (NYSE:CFR) and Limestone Bancorp (NYSE:LMST)

Cullen/Frost Bankers (NYSE:CFR) and Limestone Bancorp (NASDAQ:LMST) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Profitability

This table compares Cullen/Frost Bankers and Limestone Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cullen/Frost Bankers 27.84% 7.38% 0.83%
Limestone Bancorp 13.66% 8.07% 0.70%

Institutional & Insider Ownership

85.3% of Cullen/Frost Bankers shares are held by institutional investors. Comparatively, 35.3% of Limestone Bancorp shares are held by institutional investors. 4.8% of Cullen/Frost Bankers shares are held by company insiders. Comparatively, 17.0% of Limestone Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Cullen/Frost Bankers and Limestone Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cullen/Frost Bankers $1.50 billion 3.01 $443.60 million $6.84 10.54
Limestone Bancorp $55.50 million 1.20 $10.52 million $1.44 7.35

Cullen/Frost Bankers has higher revenue and earnings than Limestone Bancorp. Limestone Bancorp is trading at a lower price-to-earnings ratio than Cullen/Frost Bankers, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Cullen/Frost Bankers and Limestone Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cullen/Frost Bankers 6 4 2 0 1.67
Limestone Bancorp 0 2 0 0 2.00

Cullen/Frost Bankers currently has a consensus target price of $77.70, indicating a potential upside of 7.83%. Limestone Bancorp has a consensus target price of $18.00, indicating a potential upside of 70.13%. Given Limestone Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Limestone Bancorp is more favorable than Cullen/Frost Bankers.

Risk and Volatility

Cullen/Frost Bankers has a beta of 1.66, meaning that its stock price is 66% more volatile than the S&P 500. Comparatively, Limestone Bancorp has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Summary

Cullen/Frost Bankers beats Limestone Bancorp on 10 of the 14 factors compared between the two stocks.

Cullen/Frost Bankers Company Profile

Cullen/Frost Bankers, Inc. operates as the holding company for Frost Bank that offers commercial and consumer banking services in Texas. It operates in two segments, Banking and Frost Wealth Advisors. The company offers commercial banking services to corporations and other business clients, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; commercial leasing; and treasury management services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds, and foreign exchange services. Further, it acts as a correspondent for approximately 194 financial institutions; offers trust, investment, agency, and custodial services for individual and corporate clients; provides capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and supports international business activities. Additionally, the company offers insurance and securities brokerage services; holds securities for investment purposes; and provides loans to qualified borrowers, as well as investment management services to Frost-managed mutual funds, institutions, and individuals. It operates approximately 131 financial centers and 1,200 ATMs. The company serves the energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. Cullen/Frost Bankers, Inc. was founded in 1868 and is headquartered in San Antonio, Texas.

Limestone Bancorp Company Profile

Limestone Bancorp, Inc. operates as the bank holding company for Limestone Bank, Inc. that provides a range of commercial and personal banking products and services. The company offers deposit products, including checking, savings, and term certificate accounts, as well as money market accounts and fixed rate certificates. It also provides commercial loans for equipment purchases, working capital, and other financing needs of business enterprises; and commercial real estate loans that include loans on properties occupied by borrowers and tenants, as well as construction and development loans secured by land under development, or homes and commercial buildings under construction. In addition, the company offers residential real estate loans; consumer loans; agriculture loans secured by livestock, crops, and equipment; and other loans, including loans to municipalities, loans secured by stock, and overdrafts. Further, it provides drive-through banking facilities, automatic teller machines, personalized checks, credit and debit cards, electronic funds transfers through ACH services, domestic and foreign wire transfers, and loan and deposit sweep accounts; and night depository, Internet and mobile banking, treasury management, remote deposit, cash management, and vault services. The company primarily serves small to medium-sized businesses, and business owners and employees, as well as other executives and professionals. It operates 15 banking offices in 12 counties in Kentucky. The company was formerly known as Porter Bancorp, Inc. and changed its name to Limestone Bancorp, Inc. in May 2018. Limestone Bancorp, Inc. was founded in 1902 and is headquartered in Louisville, Kentucky.

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