Pinnacle Bank (OTCMKTS:PBNK) and Prosperity Bancshares (NYSE:PB) Head-To-Head Review

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

Volatility and Risk

Pinnacle Bank has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500. Comparatively, Prosperity Bancshares has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Valuation & Earnings

This table compares Pinnacle Bank and Prosperity Bancshares”s gross 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	2.07	$5.45 million	$0.91	19.34
Prosperity Bancshares	$1.74 billion	3.88	$542.84 million	$5.73	12.38

Prosperity Bancshares has higher revenue and earnings than Pinnacle Bank. Prosperity 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.

Analyst Ratings

This is a summary of current recommendations for Pinnacle Bank and Prosperity Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinnacle Bank	0	0	0	0	0.00
Prosperity Bancshares	1	7	7	0	2.40

Prosperity Bancshares has a consensus target price of $78.77, suggesting a potential upside of 11.01%. Given Prosperity Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Prosperity Bancshares is more favorable than Pinnacle Bank.

Profitability

This table compares Pinnacle Bank and Prosperity 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%
Prosperity Bancshares	31.22%	7.11%	1.40%

Institutional and Insider Ownership

8.4% of Pinnacle Bank shares are owned by institutional investors. Comparatively, 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 large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Prosperity 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 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.