Head to Head Review: Republic Bancorp (NASDAQ:RBCAA) and Prosperity Bancshares (NYSE:PB)

Prosperity Bancshares (NYSE:PB) and Republic Bancorp (NASDAQ:RBCAA) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Dividends

Prosperity Bancshares pays an annual dividend of $2.32 per share and has a dividend yield of 3.1%. Republic Bancorp pays an annual dividend of $1.62 per share and has a dividend yield of 2.4%. Prosperity Bancshares pays out 49.3% of its earnings in the form of a dividend. Republic Bancorp pays out 30.8% 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. Prosperity Bancshares has raised its dividend for 27 consecutive years and Republic Bancorp has raised its dividend for 26 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

80.7% of Prosperity Bancshares shares are owned by institutional investors. Comparatively, 24.4% of Republic Bancorp shares are owned by institutional investors. 4.3% of Prosperity Bancshares shares are owned by company insiders. Comparatively, 55.5% of Republic Bancorp shares are owned by company 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.

Earnings and Valuation

This table compares Prosperity Bancshares and Republic Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prosperity Bancshares	$1.11 billion	6.40	$419.32 million	$4.71	15.87
Republic Bancorp	$371.07 million	3.49	$90.37 million	$5.26	12.67

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

Risk & Volatility

Prosperity Bancshares has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500. Comparatively, Republic Bancorp has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500.

Profitability

This table compares Prosperity Bancshares and Republic Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prosperity Bancshares	25.39%	6.46%	1.18%
Republic Bancorp	20.65%	10.79%	1.52%

Analyst Ratings

This is a summary of current ratings and target prices for Prosperity Bancshares and Republic Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prosperity Bancshares	0	6	8	0	2.57
Republic Bancorp	0	1	0	0	2.00

Prosperity Bancshares presently has a consensus price target of $81.38, indicating a potential upside of 8.89%. Republic Bancorp has a consensus price target of $80.00, indicating a potential upside of 20.03%. Given Republic Bancorp’s higher probable upside, analysts clearly believe Republic Bancorp is more favorable than Prosperity Bancshares.

Summary

Prosperity Bancshares beats Republic Bancorp on 11 of the 17 factors compared between the two stocks.

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.

About Republic Bancorp

Republic Bancorp, Inc. operates as a bank holding company for Republic Bank & Trust Company that provides various banking products and services in the United States. It operates in six segments: Traditional Banking, Warehouse, Mortgage Banking, Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions. The company offers demand, money market accounts, savings, individual retirement accounts, time, brokered, and other certificates of deposit; and retail and commercial mortgage, construction and land development, consumer, aircraft, and marine loans. It also provides credit cards; title insurance and other financial products and services; and private banking, lockbox processing, remote deposit capture, business online banking, account reconciliation, automated clearing house processing, and internet and mobile banking services. In addition, it offers short-term and revolving credit facilities to mortgage bankers through mortgage warehouse lines of credit; mortgage banking; tax refund solutions, which facilitate the receipt and payment of federal and state tax refund products through third-party tax preparers and tax-preparation software providers; payments-related products and services to consumers through third party service providers; and consumer credit products. The company offers its services through full-services banking centers in Kentucky, Indiana, Florida, Ohio, and Tennessee. Republic Bancorp, Inc. was incorporated in 1974 and is headquartered in Louisville, Kentucky.