Comparing Texas Community Bancshares (NASDAQ:TCBS) & Cadence Bank (NYSE:CADE)

Texas Community Bancshares (NASDAQ:TCBS) and Cadence Bank (NYSE:CADE) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, institutional ownership, earnings and risk.

Analyst Ratings

This is a summary of current ratings for Texas Community Bancshares and Cadence Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Texas Community Bancshares	0	1	0	0	2.00
Cadence Bank	0	9	2	0	2.18

Cadence Bank has a consensus price target of $42.33, indicating a potential downside of 2.99%. Given Cadence Bank’s stronger consensus rating and higher probable upside, analysts plainly believe Cadence Bank is more favorable than Texas Community Bancshares.

Dividends

Texas Community Bancshares pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Cadence Bank pays an annual dividend of $1.10 per share and has a dividend yield of 2.5%. Texas Community Bancshares pays out 23.5% of its earnings in the form of a dividend. Cadence Bank pays out 39.9% 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. Texas Community Bancshares has raised its dividend for 1 consecutive years and Cadence Bank has raised its dividend for 14 consecutive years. Cadence Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

15.8% of Texas Community Bancshares shares are owned by institutional investors. Comparatively, 84.6% of Cadence Bank shares are owned by institutional investors. 19.5% of Texas Community Bancshares shares are owned by company insiders. Comparatively, 2.2% of Cadence Bank shares are owned by company 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 Texas Community Bancshares and Cadence Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Texas Community Bancshares	9.98%	4.77%	0.57%
Cadence Bank	18.15%	9.97%	1.13%

Valuation & Earnings

This table compares Texas Community Bancshares and Cadence Bank”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Texas Community Bancshares	$20.55 million	2.34	-$1.30 million	$0.85	19.41
Cadence Bank	$2.90 billion	2.74	$523.60 million	$2.76	15.81

Cadence Bank has higher revenue and earnings than Texas Community Bancshares. Cadence Bank is trading at a lower price-to-earnings ratio than Texas Community Bancshares, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Texas Community Bancshares has a beta of 0.06, suggesting that its share price is 94% less volatile than the S&P 500. Comparatively, Cadence Bank has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.

Summary

Cadence Bank beats Texas Community Bancshares on 14 of the 17 factors compared between the two stocks.

About Texas Community Bancshares

Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.

About Cadence Bank

Cadence Bank provides commercial banking and financial services. 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. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.