Head to Head Review: Pacific Alliance Bank (OTCMKTS:PFBN) & Prosperity Bancshares (NYSE:PB)

Pacific Alliance Bank (OTCMKTS:PFBN) and Prosperity Bancshares (NYSE:PB) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, risk, valuation, profitability and earnings.

Profitability

This table compares Pacific Alliance Bank and Prosperity Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pacific Alliance Bank	N/A	N/A	N/A
Prosperity Bancshares	27.69%	6.81%	1.27%

Risk and Volatility

Pacific Alliance Bank has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500. Comparatively, Prosperity Bancshares has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Earnings and Valuation

This table compares Pacific Alliance Bank and Prosperity Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pacific Alliance Bank	$23.57 million	1.18	$1.43 million	N/A	N/A
Prosperity Bancshares	$1.79 billion	3.92	$479.39 million	$5.25	14.02

Prosperity Bancshares has higher revenue and earnings than Pacific Alliance Bank.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Pacific Alliance Bank and Prosperity Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pacific Alliance Bank	0	0	0	0	0.00
Prosperity Bancshares	0	6	10	0	2.63

Prosperity Bancshares has a consensus price target of $83.80, suggesting a potential upside of 13.89%. Given Prosperity Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe Prosperity Bancshares is more favorable than Pacific Alliance Bank.

Insider & Institutional Ownership

80.7% of Prosperity Bancshares shares are owned by institutional investors. 4.2% of Prosperity Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Pacific Alliance Bank pays an annual dividend of $0.10 per share and has a dividend yield of 1.2%. Prosperity Bancshares pays an annual dividend of $2.32 per share and has a dividend yield of 3.2%. Prosperity Bancshares pays out 44.2% of its earnings in the form of a dividend. Prosperity Bancshares has raised its dividend for 27 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Prosperity Bancshares beats Pacific Alliance Bank on 14 of the 15 factors compared between the two stocks.

About Pacific Alliance Bank

Pacific Alliance Bank provides commercial and consumer banking products and services for small to midsize business owners, and employees in the United States. It offers checking, money market, savings, and individual retirement accounts; and certificates of deposit. The company also provides mortgage, commercial, term, commercial real estate, construction, and SBA loans; and lines of credit. In addition, it offers personal and business online services; and casher checks, check reorder, night deposit, direct deposit, safe deposit boxes, positive pay/check reconciliation, wire, debit card, and other services. The company was founded in 2006 and is headquartered in San Gabriel, California.

About Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.