Financial Comparison: Pacific Alliance Bank (OTCMKTS:PFBN) versus Cullen/Frost Bankers (NYSE:CFR)

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

Profitability

This table compares Cullen/Frost Bankers and Pacific Alliance Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cullen/Frost Bankers	22.21%	15.49%	1.24%
Pacific Alliance Bank	N/A	N/A	N/A

Insider and Institutional Ownership

86.9% of Cullen/Frost Bankers shares are held by institutional investors. 2.9% of Cullen/Frost Bankers shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Cullen/Frost Bankers and Pacific Alliance Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cullen/Frost Bankers	3	6	4	0	2.08
Pacific Alliance Bank	0	0	0	0	0.00

Cullen/Frost Bankers presently has a consensus price target of $142.67, suggesting a potential upside of 8.00%. Given Cullen/Frost Bankers’ stronger consensus rating and higher possible upside, analysts plainly believe Cullen/Frost Bankers is more favorable than Pacific Alliance Bank.

Valuation and Earnings

This table compares Cullen/Frost Bankers and Pacific Alliance Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cullen/Frost Bankers	$2.92 billion	2.86	$648.56 million	$9.92	13.32
Pacific Alliance Bank	$26.40 million	0.98	$2.30 million	N/A	N/A

Cullen/Frost Bankers has higher revenue and earnings than Pacific Alliance Bank.

Volatility & Risk

Cullen/Frost Bankers has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Pacific Alliance Bank has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500.

Dividends

Cullen/Frost Bankers pays an annual dividend of $4.00 per share and has a dividend yield of 3.0%. Pacific Alliance Bank pays an annual dividend of $0.10 per share and has a dividend yield of 1.2%. Cullen/Frost Bankers pays out 40.3% of its earnings in the form of a dividend. Cullen/Frost Bankers has raised its dividend for 32 consecutive years. Cullen/Frost Bankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Cullen/Frost Bankers beats Pacific Alliance Bank on 14 of the 15 factors compared between the two stocks.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that provides commercial and consumer banking services in Texas. The company offers commercial banking services to corporations, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; and treasury management services, as well as originates commercial leasing services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, first mortgage loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds transmitting, and foreign exchange services; correspondent banking activities, including check clearing, transfer of funds, fixed income security services, and securities custody and clearance services. Further, it offers trust, investment, agency, and custodial services for individual and corporate clients; capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and support for international business activities, including foreign exchange, letters of credit, export-import financing, and other related activities. Additionally, the company offers insurance and securities brokerage services; holding of securities for investment purposes; and investment management services for mutual funds, institutions, and individuals. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. The company was founded in 1868 and is headquartered in San Antonio, Texas.

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.