Contrasting Amerant Bancorp (NYSE:AMTB) and Pinnacle Financial Partners (NYSE:PNFP)

Pinnacle Financial Partners (NYSE:PNFP) and Amerant Bancorp (NYSE:AMTB) are both financial services companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Risk and Volatility

Pinnacle Financial Partners has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500. Comparatively, Amerant Bancorp has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.

Dividends

Pinnacle Financial Partners pays an annual dividend of $2.00 per share and has a dividend yield of 2.4%. Amerant Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 1.7%. Pinnacle Financial Partners pays out 24.7% of its earnings in the form of a dividend. Amerant Bancorp pays out 28.8% 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. Pinnacle Financial Partners has raised its dividend for 1 consecutive years. Pinnacle Financial Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Pinnacle Financial Partners and Amerant Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinnacle Financial Partners	0	8	10	1	2.63
Amerant Bancorp	1	2	3	0	2.33

Pinnacle Financial Partners presently has a consensus price target of $113.41, suggesting a potential upside of 36.24%. Amerant Bancorp has a consensus price target of $23.75, suggesting a potential upside of 15.00%. Given Pinnacle Financial Partners’ stronger consensus rating and higher probable upside, research analysts clearly believe Pinnacle Financial Partners is more favorable than Amerant Bancorp.

Earnings & Valuation

This table compares Pinnacle Financial Partners and Amerant Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pinnacle Financial Partners	$3.32 billion	1.95	$641.86 million	$8.09	10.29
Amerant Bancorp	$676.04 million	1.26	$52.42 million	$1.25	16.52

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

Institutional and Insider Ownership

87.4% of Pinnacle Financial Partners shares are owned by institutional investors. Comparatively, 42.1% of Amerant Bancorp shares are owned by institutional investors. 1.5% of Pinnacle Financial Partners shares are owned by insiders. Comparatively, 5.4% of Amerant Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Pinnacle Financial Partners and Amerant Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pinnacle Financial Partners	19.41%	10.10%	1.19%
Amerant Bancorp	7.75%	7.78%	0.71%

Summary

Pinnacle Financial Partners beats Amerant Bancorp on 16 of the 18 factors compared between the two stocks.

About Pinnacle Financial Partners

Pinnacle Financial Partners, Inc. operates as the bank holding company for Pinnacle Bank that provides various banking products and services to individuals, businesses, and professional entities in the United States. It accepts various deposits, including savings, noninterest-bearing and interest-bearing checking, money market, and certificate of deposit accounts; and provides treasury management services, such as online wire origination, enhanced ACH origination, positive pay, zero balance and sweep accounts, automated bill pay services, electronic receivables processing, lockbox processing, and merchant card acceptance services, small business and commercial credit cards corporate purchasing cards, and virtual accounting/deposit escrow solutions. The company also offers equipment and working capital loan; commercial real estate loans, such as investment properties and business loan; secured and unsecured loans comprising installment and term, lines of credit, and residential first mortgage, as well as home equity loans and home equity lines of credit; and credit cards for consumers and businesses. In addition, the company provides investment products; brokerage and investment advisory programs; and fiduciary and investment services, including personal trust, investment management, estate administration, endowments, foundations, individual retirement accounts, escrow services, and custody. Further, it offers insurance agency services in the property and casualty area; investment, merger and acquisition advisory services, private debt, equity and mezzanine, and other middle-market advisory services; and other banking services, including telephone and online banking, mobile banking, debit cards, direct deposit and remote deposit capture, mobile deposit option, automated teller machine, and cash management services. Pinnacle Financial Partners, Inc. was incorporated in 2000 and is headquartered in Nashville, Tennessee.

About Amerant Bancorp

Amerant Bancorp Inc. operates as the bank holding company for Amerant Bank, N.A. that provides banking products and services to individuals and businesses in the United States and internationally. The company offers checking, savings, and money market accounts; and certificates of deposits. It also provides variable and fixed rate commercial real estate loans; loans secured by owner-occupied properties; loans to domestic and foreign individuals primarily secured by personal residence; working capital loans, asset-based lending, participations in shared national credits, purchased receivables, and small business administration loans; loans to financial institutions and acceptances; and consumer loans and overdrafts, such as automobile, personal, or loans secured by cash or securities and revolving credit card agreements. In addition, the company offers trust and estate planning products and services to high-net-worth customers, brokerage and investment advisory services in global capital markets, and wealth management and fiduciary services. Further, it provides debit and credit cards, night depositories, direct deposits, cashier’s checks, safe deposit boxes, letters of credit, and treasury management services, including wire transfer, remote deposit capture, and automated clearinghouse services; derivative instruments; and online and mobile banking, account balances, statements and other documents, online transfers and bill payment, and electronic delivery of customer statements services, as well as automated teller machines, and banking by mobile devices, telephone, and mail. As of December 31, 2021, the company operated 24 banking centers comprising 17 in Florida and 7 in Texas. It also operates loan production offices in Tampa, Florida. The company was formerly known as Mercantil Bank Holding Corporation and changed its name to Amerant Bancorp Inc. in June 2019. Amerant Bancorp Inc. was founded in 1979 and is headquartered in Coral Gables, Florida.