Financial Comparison: International Bancshares (NASDAQ:IBOC) & Pinnacle Bank (OTCMKTS:PBNK)

Pinnacle Bank (OTCMKTS:PBNK) and International Bancshares (NASDAQ:IBOC) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, dividends, valuation, risk, institutional ownership, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Pinnacle Bank and International Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinnacle Bank	0	0	0	0	0.00
International Bancshares	0	0	1	0	3.00

International Bancshares has a consensus price target of $85.00, suggesting a potential upside of 15.76%. Given International Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe International Bancshares is more favorable than Pinnacle Bank.

Institutional and Insider Ownership

8.4% of Pinnacle Bank shares are held by institutional investors. Comparatively, 65.9% of International Bancshares shares are held by institutional investors. 13.4% of International Bancshares shares are held by 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.

Profitability

This table compares Pinnacle Bank and International Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pinnacle Bank	10.76%	5.25%	0.61%
International Bancshares	40.10%	14.20%	2.59%

Risk and Volatility

Pinnacle Bank has a beta of 0.28, suggesting that its stock price is 72% less volatile than the S&P 500. Comparatively, International Bancshares has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Valuation & Earnings

This table compares Pinnacle Bank and International Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pinnacle Bank	$50.63 million	2.14	$5.45 million	$0.91	20.09
International Bancshares	$1.04 billion	4.38	$409.17 million	$6.76	10.86

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

Summary

International Bancshares beats Pinnacle Bank on 13 of the 14 factors compared between the two stocks.

About Pinnacle Bank

Pinnacle Bank, a commercial bank, provides various depository and credit services in Santa Clara, San Benito, and Monterey counties. The company offers checking, savings, money market, sweep, and individual retirement accounts, as well as certificates of deposit and certificates of deposit account registry services. It also provides home equity lines of credit and single family home construction loans; and loans and lines of credit, letters of credit, commercial real estate, and government assisted loans, as well as credit cards. In addition, the company offers automated teller machine cards/debit cards, debit card protection products, and safe deposit boxes; cash management products, such as online and mobile banking, online bill payment, mobile check deposit, automated clearing house (ACH) origination, remote deposit capture, night depository box, positive pay, ACH fraud filter, merchant card processing, wire transfer, and foreign currency services; and asset based lending covering accounts receivable financing, factoring, and purchase order financing services. It serves individual and business customers, as well as nonprofit organizations in Morgan Hill, Gilroy, Salinas, and Campbell. Pinnacle Bank was founded in 2006 and is headquartered in Gilroy, California.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.