Yadkin Financial Corp (NYSE: YDKN) and Texas Capital Bancshares (NASDAQ:TCBI) are both commercial banks companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Dividends

Yadkin Financial Corp pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. Texas Capital Bancshares does not pay a dividend. Yadkin Financial Corp pays out 35.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Yadkin Financial Corp and Texas Capital Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yadkin Financial Corp 0 0 0 0 N/A
Texas Capital Bancshares 0 10 5 0 2.33

Texas Capital Bancshares has a consensus price target of $91.64, suggesting a potential upside of 13.21%. Given Texas Capital Bancshares’ higher possible upside, analysts clearly believe Texas Capital Bancshares is more favorable than Yadkin Financial Corp.

Valuation & Earnings

This table compares Yadkin Financial Corp and Texas Capital Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Yadkin Financial Corp N/A N/A N/A $1.12 30.79
Texas Capital Bancshares $764.19 million 5.26 $155.11 million $3.85 21.03

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

Insider and Institutional Ownership

69.7% of Yadkin Financial Corp shares are owned by institutional investors. Comparatively, 99.8% of Texas Capital Bancshares shares are owned by institutional investors. 3.0% of Yadkin Financial Corp shares are owned by insiders. Comparatively, 0.5% of Texas Capital Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Yadkin Financial Corp and Texas Capital Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yadkin Financial Corp 18.40% 5.41% 0.75%
Texas Capital Bancshares 22.50% 10.40% 0.89%

Volatility & Risk

Yadkin Financial Corp has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500. Comparatively, Texas Capital Bancshares has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500.

Summary

Texas Capital Bancshares beats Yadkin Financial Corp on 10 of the 12 factors compared between the two stocks.

Yadkin Financial Corp Company Profile

Yadkin Financial Corporation is a bank holding company. The Company conducts its business operations through its subsidiary, Yadkin Bank, which is a chartered community bank that provides services in approximately 110 branches across North Carolina and South Carolina. Yadkin Bank provides banking, mortgage, investment and insurance services to businesses and consumers across the Carolinas. It operates through a segment, which is providing general commercial banking and financial services to individuals and businesses located in North Carolina and South Carolina, and to customers in various states through its Small Business Administration (SBA) lending program. It offers various loans, such as commercial and industrial (C&I) loans and government-guaranteed loans. The Company’s investment securities portfolio includes the United States Government-sponsored enterprise (GSE) obligations and securities guaranteed by the United States SBA. The Company’s primary source of funds is deposits.

Texas Capital Bancshares Company Profile

Texas Capital Bancshares, Inc. is a bank holding and a financial holding company. The Company is the parent of Texas Capital Bank, National Association (the Bank). It offers a range of loan, deposit account and other financial products and services to its customers. It offers a range of products and services for its business customers, including commercial loans for general corporate purposes, including financing for working capital, internal growth, acquisitions and financing for business insurance premiums; medium- and long-term tax-exempt loans for municipalities and other governmental and tax-exempt entities; wealth management and trust services, and letters of credit. It also provides banking services for its individual customers, including personal wealth management and trust services; certificates of deposit; interest-bearing and non-interest-bearing checking accounts; traditional money market and savings accounts; loans, both secured and unsecured, and Internet banking.

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