Cullen/Frost Bankers (NYSE:CFR) versus MetroCity Bankshares (NASDAQ:MCBS) Financial Analysis

MetroCity Bankshares (NASDAQ:MCBS) and Cullen/Frost Bankers (NYSE:CFR) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, risk, institutional ownership, dividends, profitability and earnings.

Volatility and Risk

MetroCity Bankshares has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Cullen/Frost Bankers has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Earnings & Valuation

This table compares MetroCity Bankshares and Cullen/Frost Bankers”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MetroCity Bankshares	$246.01 million	4.09	$68.53 million	$2.88	12.15
Cullen/Frost Bankers	$2.92 billion	3.41	$648.56 million	$10.58	15.12

Cullen/Frost Bankers has higher revenue and earnings than MetroCity Bankshares. MetroCity Bankshares is trading at a lower price-to-earnings ratio than Cullen/Frost Bankers, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

25.3% of MetroCity Bankshares shares are owned by institutional investors. Comparatively, 86.9% of Cullen/Frost Bankers shares are owned by institutional investors. 20.2% of MetroCity Bankshares shares are owned by insiders. Comparatively, 1.1% of Cullen/Frost Bankers shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

MetroCity Bankshares pays an annual dividend of $1.16 per share and has a dividend yield of 3.3%. Cullen/Frost Bankers pays an annual dividend of $4.12 per share and has a dividend yield of 2.6%. MetroCity Bankshares pays out 40.3% of its earnings in the form of a dividend. Cullen/Frost Bankers pays out 38.9% 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. Cullen/Frost Bankers has raised its dividend for 32 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and price targets for MetroCity Bankshares and Cullen/Frost Bankers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MetroCity Bankshares	0	1	1	0	2.50
Cullen/Frost Bankers	1	8	5	0	2.29

MetroCity Bankshares presently has a consensus target price of $33.00, indicating a potential downside of 5.66%. Cullen/Frost Bankers has a consensus target price of $166.67, indicating a potential upside of 4.19%. Given Cullen/Frost Bankers’ higher probable upside, analysts plainly believe Cullen/Frost Bankers is more favorable than MetroCity Bankshares.

Profitability

This table compares MetroCity Bankshares and Cullen/Frost Bankers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MetroCity Bankshares	28.40%	15.16%	1.82%
Cullen/Frost Bankers	23.34%	15.55%	1.29%

Summary

Cullen/Frost Bankers beats MetroCity Bankshares on 10 of the 17 factors compared between the two stocks.

About MetroCity Bankshares

MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that engages in the provision of banking products and services in the United States. It offers customary banking services, such as consumer and commercial checking accounts, savings, and money market accounts, as well as certificates of deposit. The company also provides commercial and consumer loans, including single family residential loans; construction and development, and owner and non-owner occupied commercial real estate loans; letters of credit; and commercial and industrial loans, residential mortgage loans, and SBA loans. In addition, it offers online banking services, which include access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions, such as remote check deposit with mobile bill pay; and automated teller machines and telephone banking services. Further, it provides debit cards for checking customers, direct deposits, and cashier's checks; treasury management services, including wire transfer, automated clearing house, and stop payments services; and cash management deposit products, such as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company was founded in 2006 and is headquartered in Atlanta, Georgia.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that provides commercial and consumer banking services in Texas. The company offers commercial banking services to corporations, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; and treasury management services, as well as originates commercial leasing services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, first mortgage loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds transmitting, and foreign exchange services; correspondent banking activities, including check clearing, transfer of funds, fixed income security services, and securities custody and clearance services. Further, it offers trust, investment, agency, and custodial services for individual and corporate clients; capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and support for international business activities, including foreign exchange, letters of credit, export-import financing, and other related activities. Additionally, the company offers insurance and securities brokerage services; holding of securities for investment purposes; and investment management services for mutual funds, institutions, and individuals. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. The company was founded in 1868 and is headquartered in San Antonio, Texas.