Financial Survey: Hilltop (NYSE:HTH) & Stock Yards Bancorp (NASDAQ:SYBT)

Stock Yards Bancorp (NASDAQ:SYBT) and Hilltop (NYSE:HTH) are both mid-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.

Insider & Institutional Ownership

56.5% of Stock Yards Bancorp shares are owned by institutional investors. Comparatively, 57.1% of Hilltop shares are owned by institutional investors. 3.4% of Stock Yards Bancorp shares are owned by company insiders. Comparatively, 29.9% of Hilltop shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Stock Yards Bancorp and Hilltop, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stock Yards Bancorp	0	4	0	0	2.00
Hilltop	0	4	1	0	2.20

Stock Yards Bancorp currently has a consensus target price of $83.67, suggesting a potential upside of 22.55%. Hilltop has a consensus target price of $34.00, suggesting a potential downside of 2.76%. Given Stock Yards Bancorp’s higher possible upside, equities analysts clearly believe Stock Yards Bancorp is more favorable than Hilltop.

Dividends

Stock Yards Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 1.9%. Hilltop pays an annual dividend of $0.72 per share and has a dividend yield of 2.1%. Stock Yards Bancorp pays out 27.9% of its earnings in the form of a dividend. Hilltop pays out 28.7% 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. Stock Yards Bancorp has increased its dividend for 15 consecutive years and Hilltop has increased its dividend for 8 consecutive years.

Volatility & Risk

Stock Yards Bancorp has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500. Comparatively, Hilltop has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Earnings and Valuation

This table compares Stock Yards Bancorp and Hilltop”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stock Yards Bancorp	$508.11 million	3.96	$114.54 million	$4.58	14.91
Hilltop	$1.61 billion	1.33	$113.21 million	$2.51	13.93

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

Profitability

This table compares Stock Yards Bancorp and Hilltop’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stock Yards Bancorp	24.50%	13.65%	1.49%
Hilltop	9.86%	7.18%	1.01%

Summary

Stock Yards Bancorp beats Hilltop on 10 of the 17 factors compared between the two stocks.

About Stock Yards Bancorp

Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.

About Hilltop

Hilltop Holdings Inc. provides business and consumer banking services. It operates through three segments: Banking, Broker-Dealer, and Mortgage Origination. The 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, term, agricultural and commercial real estate, equipment loans, and other lending products; and mortgage, commercial and industrial loans, and term and construction finance. It also provides treasury management, asset management, check cards, safe deposit boxes, online banking, bill pay, and overdraft privilege services; and estate planning, management and administration, investment portfolio management, employee benefit accounts, and individual retirement accounts services, as well as automated teller machines. The Broker-Dealer segment offers public finance services that assist public entities in originating, syndicating, and distributing securities of municipalities and political subdivisions; specialized advisory and investment banking services; advice and guidance to arbitrage rebate compliance, portfolio management, and local government investment pool administration; advisory services and products for derivatives and commodities; agricultural insurance; and sells, trades in, and underwrites U.S. government and government agency bonds, corporate bonds, and municipal bonds; mortgage-backed, asset-backed, and commercial mortgage-backed securities and structured products; and provides asset and liability management advisory, clearing, retail, and securities lending services. The Mortgage Origination segment offers fixed and adjustable rate mortgages, jumbo, new construction, Federal Housing Administration, Veterans Affairs, and United States Department of Agriculture loans. Hilltop Holdings Inc. was incorporated in 1998 and is based in Dallas, Texas.