Pinnacle Financial Partners (NYSE:PNFP) & SmartFinancial (NASDAQ:SMBK) Financial Comparison

Pinnacle Financial Partners (NYSE:PNFP) and SmartFinancial (NASDAQ:SMBK) are both financial services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Insider and Institutional Ownership

87.4% of Pinnacle Financial Partners shares are held by institutional investors. Comparatively, 58.8% of SmartFinancial shares are held by institutional investors. 1.5% of Pinnacle Financial Partners shares are held by company insiders. Comparatively, 7.6% of SmartFinancial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Pinnacle Financial Partners and SmartFinancial’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%
SmartFinancial	12.67%	7.33%	0.71%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pinnacle Financial Partners	$1.74 billion	3.77	$641.86 million	$8.09	10.45
SmartFinancial	$196.50 million	3.35	$36.14 million	$2.98	12.92

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

Dividends

Pinnacle Financial Partners pays an annual dividend of $2.00 per share and has a dividend yield of 2.4%. SmartFinancial pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Pinnacle Financial Partners pays out 24.7% of its earnings in the form of a dividend. SmartFinancial pays out 10.7% 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 SmartFinancial has raised its dividend for 3 consecutive years.

Volatility & Risk

Pinnacle Financial Partners has a beta of 1.02, indicating that its stock price is 2% more volatile than the S&P 500. Comparatively, SmartFinancial has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Pinnacle Financial Partners and SmartFinancial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinnacle Financial Partners	0	8	10	1	2.63
SmartFinancial	0	4	1	1	2.50

Pinnacle Financial Partners presently has a consensus price target of $113.41, indicating a potential upside of 34.21%. SmartFinancial has a consensus price target of $40.50, indicating a potential upside of 5.17%. Given Pinnacle Financial Partners’ stronger consensus rating and higher possible upside, research analysts clearly believe Pinnacle Financial Partners is more favorable than SmartFinancial.

Summary

Pinnacle Financial Partners beats SmartFinancial on 13 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 SmartFinancial

SmartFinancial, Inc. operates as the bank holding company for SmartBank that provides various financial services to individuals and corporate customers in Tennessee, Alabama, and Florida. It operates through Commercial Real Estate, Consumer Real Estate, Construction and Land Development, Commercial and Industrial, Leases, and Consumer and Other segments. The company offers noninterest-bearing and interest-bearing checking, interest-bearing demand, savings, money market, time deposit, individual retirement accounts, as well as certificates of deposit. It also provides commercial and residential real estate, consumer real estate, and construction and land development loans; commercial and financial loans and leases; commercial business and mortgage loans; and direct consumer installment, educational, agriculture, and other revolving credit loans; equipment financing, heavy equipment, semis, and trailers loans and leases to small and mid-size companies; letters of credit; and overdraft facilities. In addition, the company offers wealth management, insurance, mortgage origination, and internet and mobile banking services. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.