Texas Capital Bancshares (NASDAQ:TCBI – Get Free Report) and Dime Community Bancshares (NASDAQ:DCOM – Get Free Report) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.
Institutional & Insider Ownership
96.9% of Texas Capital Bancshares shares are held by institutional investors. Comparatively, 75.3% of Dime Community Bancshares shares are held by institutional investors. 1.9% of Texas Capital Bancshares shares are held by company insiders. Comparatively, 7.4% of Dime Community Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of current recommendations and price targets for Texas Capital Bancshares and Dime Community Bancshares, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Texas Capital Bancshares | 1 | 8 | 4 | 0 | 2.23 |
| Dime Community Bancshares | 0 | 2 | 3 | 1 | 2.83 |
Profitability
This table compares Texas Capital Bancshares and Dime Community Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Texas Capital Bancshares | 17.90% | 10.86% | 1.10% |
| Dime Community Bancshares | 15.15% | 9.12% | 0.83% |
Valuation and Earnings
This table compares Texas Capital Bancshares and Dime Community Bancshares”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Texas Capital Bancshares | $2.00 billion | 2.06 | $330.24 million | $7.69 | 12.31 |
| Dime Community Bancshares | $489.44 million | 3.63 | $110.68 million | $2.77 | 14.53 |
Texas Capital Bancshares has higher revenue and earnings than Dime Community Bancshares. Texas Capital Bancshares is trading at a lower price-to-earnings ratio than Dime Community Bancshares, indicating that it is currently the more affordable of the two stocks.
Dividends
Texas Capital Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 0.8%. Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. Texas Capital Bancshares pays out 10.4% of its earnings in the form of a dividend. Dime Community Bancshares pays out 36.1% 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. Dime Community Bancshares has raised its dividend for 2 consecutive years. Dime Community Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Texas Capital Bancshares has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500. Comparatively, Dime Community Bancshares has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.
Summary
Texas Capital Bancshares beats Dime Community Bancshares on 10 of the 18 factors compared between the two stocks.
About Texas Capital Bancshares
Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. The company offers commercial banking; consumer banking; investment banking solutions, including capital markets, mergers and acquisitions, and syndicated finance, as well as financial sponsor coverage, capital solutions, and institutional services; and wealth management services, such as investment management, financial planning, lockbox and insurance, securities-based lending, estate planning, and business succession, as well as philanthropic, trustee and executor, custom credit, and depository services. It also provides deposit accounts, analyzed accounts, commercial card, SBA and business loans, packaged solutions, and merchant services; liquidity and investments, working capital, international trade and payment, and treasury and credit products; and commercial real estate, homebuilder and community, and mortgage finance. In addition, the company offers payables and receivables management; online and mobile banking; term loans and lines of credit, equipment finance and lease, acquisition finance, and asset-based lending; private wealth advisory solutions; and checking and savings accounts, debit and credit cards, and certificates of deposit, as well as ETF and funds management services. Further, it provides financial institution money market accounts and loan syndication products; commercial loans for financing for working capital, organic growth, and acquisitions; real estate term and construction loans; mortgage warehouse lending services; treasury management, trust, and advisory and escrow services; and letters of credit. The company operates in Austin, Dallas, Fort Worth, Houston, and San Antonio metropolitan areas of Texas. Texas Capital Bancshares, Inc. was incorporated in 1996 and is headquartered in Dallas, Texas.
About Dime Community Bancshares
Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.
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