Head to Head Contrast: Cadence Bank (NYSE:CADE) & Red River Bancshares (NASDAQ:RRBI)

Red River Bancshares (NASDAQ:RRBIGet Rating) and Cadence Bank (NYSE:CADEGet Rating) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Dividends

Red River Bancshares pays an annual dividend of $0.28 per share and has a dividend yield of 0.5%. Cadence Bank pays an annual dividend of $0.88 per share and has a dividend yield of 3.5%. Red River Bancshares pays out 6.3% of its earnings in the form of a dividend. Cadence Bank pays out 51.2% 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. Red River Bancshares has raised its dividend for 1 consecutive years and Cadence Bank has raised its dividend for 2 consecutive years. Cadence Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Red River Bancshares and Cadence Bank’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Red River Bancshares $101.83 million 3.76 $32.95 million $4.45 11.98
Cadence Bank $1.26 billion 2.20 $195.16 million $1.72 14.81

Cadence Bank has higher revenue and earnings than Red River Bancshares. Red River Bancshares 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 Red River Bancshares and Cadence Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Red River Bancshares 32.19% 10.88% 1.06%
Cadence Bank 15.87% 10.63% 1.11%

Insider and Institutional Ownership

17.9% of Red River Bancshares shares are held by institutional investors. Comparatively, 71.0% of Cadence Bank shares are held by institutional investors. 22.5% of Red River Bancshares shares are held by insiders. Comparatively, 2.2% of Cadence Bank shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Red River Bancshares has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, Cadence Bank has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Red River Bancshares and Cadence Bank, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Red River Bancshares 0 0 0 0 N/A
Cadence Bank 0 0 3 1 3.25

Cadence Bank has a consensus price target of $37.50, suggesting a potential upside of 47.17%. Given Cadence Bank’s higher possible upside, analysts clearly believe Cadence Bank is more favorable than Red River Bancshares.

Summary

Cadence Bank beats Red River Bancshares on 11 of the 17 factors compared between the two stocks.

Red River Bancshares Company Profile (Get Rating)

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It also offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. It operates a network of 27 banking centers throughout Louisiana and two combined loan and deposit production offices in Lafayette and New Orleans, Louisiana. The company was incorporated in 1998 and is headquartered in Alexandria, Louisiana.

Cadence Bank Company Profile (Get Rating)

Cadence Bank provides commercial banking and financial services in the United States. 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. As of March 3, 2022, it operated approximately 400 branch locations across the South, Midwest, and Texas. The company was incorporated in 1876 and is headquartered in Tupelo, Mississippi.

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