Cadence Bank (NYSE:CADE – Get Rating) and BayFirst Financial (NASDAQ:BAFN – Get Rating) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.
Profitability
This table compares Cadence Bank and BayFirst Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cadence Bank | 22.56% | 13.05% | 1.15% |
| BayFirst Financial | 0.27% | 6.62% | 0.61% |
Earnings and Valuation
This table compares Cadence Bank and BayFirst Financial’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cadence Bank | $921.95 million | 3.06 | $463.24 million | $2.46 | 10.57 |
| BayFirst Financial | $70.12 million | 1.06 | -$350,000.00 | ($0.10) | -184.00 |
Analyst Ratings
This is a summary of current recommendations and price targets for Cadence Bank and BayFirst Financial, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cadence Bank | 0 | 2 | 3 | 1 | 2.83 |
| BayFirst Financial | 0 | 0 | 0 | 0 | N/A |
Cadence Bank presently has a consensus target price of $30.13, indicating a potential upside of 15.91%. Given Cadence Bank’s higher probable upside, equities analysts clearly believe Cadence Bank is more favorable than BayFirst Financial.
Volatility & Risk
Cadence Bank has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, BayFirst Financial has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500.
Dividends
Cadence Bank pays an annual dividend of $0.94 per share and has a dividend yield of 3.6%. BayFirst Financial pays an annual dividend of $0.32 per share and has a dividend yield of 1.7%. Cadence Bank pays out 38.2% of its earnings in the form of a dividend. BayFirst Financial pays out -320.0% 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. Cadence Bank has increased its dividend for 3 consecutive years. Cadence Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
17.0% of BayFirst Financial shares are held by institutional investors. 2.2% of Cadence Bank shares are held by company insiders. Comparatively, 20.7% of BayFirst Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Summary
Cadence Bank beats BayFirst Financial on 14 of the 17 factors compared between the two stocks.
About Cadence Bank
Cadence Bank provides banking and financial solutions to consumers, businesses and corporations. Its services and products include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, lending, asset-based lending, commercial real estate, equipment financing, correspondent banking, SBA lending, foreign exchange, wealth management, investment and trust services, financial planning, retirement plan management, and personal and business insurance. The bank was founded in 2009 and is headquartered in Tupelo, MS.
About BayFirst Financial
BayFirst Financial Corp. is a bank holding company, which through its subsidiary, engages in the provision of banking services. Its products include demand deposits, money market accounts, savings deposits, time deposits, commercial business loans, real estate loans, and consumer loans. It operates through the Banking and Residential Mortgage Lending segments. The company was founded on September 1, 2000 and is headquartered in St. Petersburg, FL.
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