Columbia Banking System (NASDAQ: COLB) and Pinnacle Financial Partners (NASDAQ:PNFP) are both mid-cap financials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Columbia Banking System and Pinnacle Financial Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Columbia Banking System 0 2 2 0 2.50
Pinnacle Financial Partners 0 1 5 0 2.83

Columbia Banking System presently has a consensus target price of $45.00, suggesting a potential upside of 3.21%. Pinnacle Financial Partners has a consensus target price of $75.00, suggesting a potential upside of 12.70%. Given Pinnacle Financial Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Pinnacle Financial Partners is more favorable than Columbia Banking System.

Earnings and Valuation

This table compares Columbia Banking System and Pinnacle Financial Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Columbia Banking System $426.05 million 7.47 $104.86 million $2.19 19.91
Pinnacle Financial Partners $484.61 million 10.67 $127.22 million $3.24 20.54

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

Risk & Volatility

Columbia Banking System has a beta of 1.25, meaning that its stock price is 25% more volatile than the S&P 500. Comparatively, Pinnacle Financial Partners has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Dividends

Columbia Banking System pays an annual dividend of $0.88 per share and has a dividend yield of 2.0%. Pinnacle Financial Partners pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. Columbia Banking System pays out 40.2% of its earnings in the form of a dividend. Pinnacle Financial Partners pays out 17.3% 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.

Insider and Institutional Ownership

76.2% of Columbia Banking System shares are held by institutional investors. Comparatively, 71.8% of Pinnacle Financial Partners shares are held by institutional investors. 1.2% of Columbia Banking System shares are held by insiders. Comparatively, 5.4% of Pinnacle Financial Partners shares are held 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.

Profitability

This table compares Columbia Banking System and Pinnacle Financial Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Columbia Banking System 27.72% 9.93% 1.33%
Pinnacle Financial Partners 27.41% 7.36% 1.18%

Summary

Pinnacle Financial Partners beats Columbia Banking System on 11 of the 16 factors compared between the two stocks.

About Columbia Banking System

Columbia Banking System, Inc. (Columbia) is a bank holding company for Columbia State Bank (the Bank) and Columbia Trust Company (Columbia Trust). The Company provides a range of banking services to small and medium-sized businesses, professionals and individuals. It offers products and services, which include Personal Banking, Business Banking and Wealth Management. Its Personal Banking products and services include Checking and Saving Accounts; Consumer Lending; Digital Banking; Residential Lending, and VISA Card Services. Its Business Banking products and services include Agricultural Lending; Commercial and Industrial Lending; International Banking; Merchant Card Services; Municipal Lending; Real Estate and Real Estate Construction Lending; Remote Deposit Capture; Small Business Administration (SBA) Lending; Small Business Services, and Treasury Management. Its Wealth Management products and services include Investment Services, Private Banking and Professional Banking.

About Pinnacle Financial Partners

Pinnacle Financial Partners, Inc. is a bank holding company. The Company operates through its subsidiary, Pinnacle Bank. The Company operates as a community bank primarily in the urban markets of Nashville, Knoxville, Memphis and Chattanooga, Tennessee and other counties. It provides the personalized service associated with small community banks, while seeking to offer the products and services, such as investments and treasury management. Pinnacle Bank offers an array of convenience-centered products and services, including round the clock telephone and Internet banking, mobile banking, debit and credit cards, direct deposit, remote deposit and cash management services for small- to medium-sized businesses. In addition, Pinnacle Bank is associated with a network of automated teller machines of other financial institutions that its clients are able to use throughout Tennessee and other regions.

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