Capital Bancorp (NASDAQ:CBNK) and Pinnacle Financial Partners (NASDAQ:PNFP) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, institutional ownership, valuation, risk and profitability.

Risk and Volatility

Capital Bancorp has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Pinnacle Financial Partners has a beta of 1.44, meaning that its stock price is 44% more volatile than the S&P 500.

Insider and Institutional Ownership

22.4% of Capital Bancorp shares are owned by institutional investors. Comparatively, 79.0% of Pinnacle Financial Partners shares are owned by institutional investors. 39.4% of Capital Bancorp shares are owned by company insiders. Comparatively, 3.0% of Pinnacle Financial Partners shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Capital Bancorp and Pinnacle Financial Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Capital Bancorp 15.66% 13.72% 1.38%
Pinnacle Financial Partners 30.10% 9.75% 1.53%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Capital Bancorp and Pinnacle Financial Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capital Bancorp 0 0 0 0 N/A
Pinnacle Financial Partners 0 3 1 0 2.25

Pinnacle Financial Partners has a consensus target price of $66.25, indicating a potential upside of 7.57%. Given Pinnacle Financial Partners’ higher probable upside, analysts clearly believe Pinnacle Financial Partners is more favorable than Capital Bancorp.

Earnings and Valuation

This table compares Capital Bancorp and Pinnacle Financial Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Capital Bancorp $107.87 million 1.87 $16.90 million $1.21 12.07
Pinnacle Financial Partners $1.33 billion 3.56 $400.88 million $5.37 11.47

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

Summary

Pinnacle Financial Partners beats Capital Bancorp on 10 of the 13 factors compared between the two stocks.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various commercial banking products and services to businesses, not-for-profit associations, and entrepreneurs in the United States. The company offers a range of deposit products and services, including various checking and savings accounts, certificates of deposit, money market accounts, debit cards, remote deposit capture services, online and mobile banking services, e-statements, and bank-by-mail and direct deposit services, as well as business accounts, and cash and treasury management services. It also provides lending services, such as residential and commercial real estate loans, construction loans, commercial business loans, and credit card lines, as well as loans to individuals comprising secured and unsecured installment and term loans, car loans, and boat loans. In addition, the company originates residential mortgages for sale in the secondary market; and offers short-term secured real estate financing services. It operates through five commercial bank branches, four mortgage offices, one loan production office, a limited service branch, corporate offices, and operations facilities in the greater Washington, D.C. and Baltimore, Maryland markets. The company was incorporated in 1998 and is headquartered in Rockville, Maryland.

About Pinnacle Financial Partners

Pinnacle Financial Partners, Inc. operates as a bank holding company for Pinnacle Bank that provides various banking products and services in the United States. The company accepts various deposits, including savings, checking, interest-bearing checking, money market, and certificate of deposit accounts. Its loan products include commercial loans, such as equipment and working capital loans; commercial real estate loans comprising investment properties and business loans secured by real estate; and loans to individuals consisting of secured and unsecured installment and term loans, lines of credit, residential first mortgage loans, and home equity loans and lines of credit. The company also offers various securities and other financial products; investment products; brokerage and investment advisory programs; and fiduciary and investment management services, such as personal trust, endowments, foundations, individual retirement accounts, pensions, and custody. In addition, it provides insurance products primarily in the property and casualty area; merger and acquisition advisory services; and private debt, equity and mezzanine, interest rate derivatives, and other middle-market advisory services. Further, the company offers treasury management, telephone and online banking, mobile banking, debit and credit cards, direct and remote deposit, automated teller machine, and cash management services. It serves individuals, small-to medium-sized businesses, and professional entities. As of December 31, 2018, the company operates 114 offices, including 47 in Tennessee, 38 in North Carolina, 21 in South Carolina, and 8 in Virginia. Pinnacle Financial Partners, Inc. was founded in 2000 and is headquartered in Nashville, Tennessee.

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