HomeStreet (NASDAQ:HMST) vs. Cadence Bank (NYSE:CADE) Financial Analysis

Cadence Bank (NYSE:CADE) and HomeStreet (NASDAQ:HMST) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, valuation, earnings, institutional ownership, risk, analyst recommendations and profitability.

Valuation and Earnings

This table compares Cadence Bank and HomeStreet’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cadence Bank	$921.95 million	5.46	$542.30 million	$3.13	8.83
HomeStreet	$441.66 million	0.46	-$27.51 million	($2.13)	-5.09

Cadence Bank has higher revenue and earnings than HomeStreet. HomeStreet is trading at a lower price-to-earnings ratio than Cadence Bank, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

84.6% of Cadence Bank shares are held by institutional investors. Comparatively, 74.7% of HomeStreet shares are held by institutional investors. 2.6% of Cadence Bank shares are held by company insiders. Comparatively, 4.6% of HomeStreet 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.

Volatility & Risk

Cadence Bank has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, HomeStreet has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.

Profitability

This table compares Cadence Bank and HomeStreet’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cadence Bank	23.83%	8.97%	0.86%
HomeStreet	-8.97%	-0.43%	-0.02%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Cadence Bank and HomeStreet, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cadence Bank	0	5	6	1	2.67
HomeStreet	0	3	1	0	2.25

Cadence Bank currently has a consensus price target of $31.18, suggesting a potential upside of 12.81%. HomeStreet has a consensus price target of $12.00, suggesting a potential upside of 10.70%. Given Cadence Bank’s stronger consensus rating and higher probable upside, analysts plainly believe Cadence Bank is more favorable than HomeStreet.

Summary

Cadence Bank beats HomeStreet on 13 of the 15 factors compared between the two stocks.

About Cadence Bank

Cadence Bank provides commercial banking and financial services. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company's products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.

About HomeStreet

HomeStreet, Inc. operates as the bank holding company for HomeStreet Bank that provides commercial, mortgage, and consumer/retail banking services in the Western United States. The company offers personal and business checking, savings, interest-bearing negotiable order of withdrawal, and money market accounts, as well as certificates of deposit; credit cards; insurance; and treasury management services. Its loan products include commercial real estate (CRE), multifamily, construction and land development, owner occupied CRE and commercial business loans; and single family, home equity, and other loans. In addition, the company offers online, mobile, and telephone banking. It serves small and medium sized businesses, real estate investors, professional firms, and individuals. The company operates through branches and ATMs. The company was formerly known as Continental Mortgage and Loan Company. HomeStreet, Inc. was incorporated in 1921 and is headquartered in Seattle, Washington.