Financial Contrast: Park National (NYSE:PRK) and Pinnacle Financial Partners (NYSE:PNFP)

Pinnacle Financial Partners (NYSE:PNFP) and Park National (NYSE:PRK) are both mid-cap financial services companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Risk and Volatility

Pinnacle Financial Partners has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Park National has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Dividends

Pinnacle Financial Partners pays an annual dividend of $2.00 per share and has a dividend yield of 2.4%. Park National pays an annual dividend of $4.40 per share and has a dividend yield of 2.8%. Pinnacle Financial Partners pays out 24.7% of its earnings in the form of a dividend. Park National pays out 39.6% 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. Pinnacle Financial Partners has raised its dividend for 1 consecutive years and Park National has raised its dividend for 8 consecutive years. Park National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Pinnacle Financial Partners and Park National”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pinnacle Financial Partners	$3.32 billion	1.97	$641.86 million	$8.09	10.40
Park National	$557.19 million	5.18	$151.42 million	$11.12	14.38

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

Insider and Institutional Ownership

87.4% of Pinnacle Financial Partners shares are owned by institutional investors. Comparatively, 62.7% of Park National shares are owned by institutional investors. 1.5% of Pinnacle Financial Partners shares are owned by insiders. Comparatively, 2.2% of Park National shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Pinnacle Financial Partners and Park National, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinnacle Financial Partners	0	8	10	1	2.63
Park National	0	3	0	1	2.50

Pinnacle Financial Partners presently has a consensus price target of $113.41, suggesting a potential upside of 34.84%. Park National has a consensus price target of $181.50, suggesting a potential upside of 13.52%. Given Pinnacle Financial Partners’ stronger consensus rating and higher possible upside, research analysts clearly believe Pinnacle Financial Partners is more favorable than Park National.

Profitability

This table compares Pinnacle Financial Partners and Park National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pinnacle Financial Partners	19.41%	10.10%	1.19%
Park National	23.46%	12.31%	1.50%

Summary

Park National beats Pinnacle Financial Partners on 9 of the 17 factors compared between the two stocks.

About Pinnacle Financial Partners

Pinnacle Financial Partners, Inc. operates as the bank holding company for Pinnacle Bank that provides various banking products and services to individuals, businesses, and professional entities in the United States. It accepts various deposits, including savings, noninterest-bearing and interest-bearing checking, money market, and certificate of deposit accounts; and provides treasury management services, such as online wire origination, enhanced ACH origination, positive pay, zero balance and sweep accounts, automated bill pay services, electronic receivables processing, lockbox processing, and merchant card acceptance services, small business and commercial credit cards corporate purchasing cards, and virtual accounting/deposit escrow solutions. The company also offers equipment and working capital loan; commercial real estate loans, such as investment properties and business loan; secured and unsecured loans comprising installment and term, lines of credit, and residential first mortgage, as well as home equity loans and home equity lines of credit; and credit cards for consumers and businesses. In addition, the company provides investment products; brokerage and investment advisory programs; and fiduciary and investment services, including personal trust, investment management, estate administration, endowments, foundations, individual retirement accounts, escrow services, and custody. Further, it offers insurance agency services in the property and casualty area; investment, merger and acquisition advisory services, private debt, equity and mezzanine, and other middle-market advisory services; and other banking services, including telephone and online banking, mobile banking, debit cards, direct deposit and remote deposit capture, mobile deposit option, automated teller machine, and cash management services. Pinnacle Financial Partners, Inc. was incorporated in 2000 and is headquartered in Nashville, Tennessee.

About Park National

Park National Corporation operates as the bank holding company for Park National Bank that provides commercial banking and trust services in small and medium population areas. The company offers deposits for demand, savings, and time accounts; trust and wealth management services; cash management services; safe deposit operations; electronic funds transfers; Internet and mobile banking solutions with bill pay service; credit cards; and various additional banking-related services. It also provides commercial loans, including financing for industrial and commercial properties, financing for equipment, inventory and accounts receivable, acquisition financing, and commercial leasing, as well as for consumer finance companies; commercial real estate loans comprising mortgage loans to developers and owners of commercial real estate; originates financing leases primarily for the purchase of commercial vehicles, operating/manufacturing equipment, and municipal vehicles/equipment; consumer loans, such as automobile loans; consumer finance services; home equity lines of credit; and residential real estate and construction loans, as well as installment loans and commercial loans. In addition, the company offers aircraft financing services; and ParkDirect, a personal banking application. Park National Corporation was founded in 1908 and is headquartered in Newark, Ohio.