Critical Review: Hancock Whitney (NASDAQ:HWC) & Enterprise Financial Services (NASDAQ:EFSC)

Hancock Whitney (NASDAQ:HWC) and Enterprise Financial Services (NASDAQ:EFSC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and price targets for Hancock Whitney and Enterprise Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hancock Whitney	0	3	6	0	2.67
Enterprise Financial Services	0	0	3	0	3.00

Hancock Whitney presently has a consensus target price of $56.78, suggesting a potential upside of 13.60%. Enterprise Financial Services has a consensus target price of $50.67, suggesting a potential upside of 0.53%. Given Hancock Whitney’s higher possible upside, equities analysts plainly believe Hancock Whitney is more favorable than Enterprise Financial Services.

Dividends

Hancock Whitney pays an annual dividend of $1.60 per share and has a dividend yield of 3.2%. Enterprise Financial Services pays an annual dividend of $1.08 per share and has a dividend yield of 2.1%. Hancock Whitney pays out 37.3% of its earnings in the form of a dividend. Enterprise Financial Services pays out 23.1% 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

81.2% of Hancock Whitney shares are owned by institutional investors. Comparatively, 72.2% of Enterprise Financial Services shares are owned by institutional investors. 1.1% of Hancock Whitney shares are owned by insiders. Comparatively, 2.3% of Enterprise Financial Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Hancock Whitney and Enterprise Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hancock Whitney	18.63%	11.51%	1.22%
Enterprise Financial Services	19.61%	10.95%	1.24%

Valuation & Earnings

This table compares Hancock Whitney and Enterprise Financial Services’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hancock Whitney	$1.36 billion	3.20	$392.60 million	$4.29	11.65
Enterprise Financial Services	$531.97 million	3.55	$194.06 million	$4.67	10.79

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

Volatility and Risk

Hancock Whitney has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500. Comparatively, Enterprise Financial Services has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Summary

Hancock Whitney beats Enterprise Financial Services on 9 of the 16 factors compared between the two stocks.

About Hancock Whitney

Hancock Whitney Corporation operates as the financial holding company for Hancock Whitney Bank that provides traditional and online banking services to commercial, small business, and retail customers. It offers various transaction and savings deposit products consisting of brokered deposits, time deposits, and money market accounts; treasury management services, secured and unsecured loan products including revolving credit facilities, and letters of credit and similar financial guarantees; and trust and investment management services to retirement plans, corporations, and individuals, and investment advisory and brokerage products. The company also provides commercial and industrial loans including real and non-real estate loans; construction and land development loans; and residential mortgages, as well as consumer loans. In addition, it offers commercial finance products to middle market and corporate clients, including leases and related structures; facilitates investments in new market tax credit activities and holding certain foreclosed assets; provides customers access to fixed annuity and life insurance products; and underwriting transactions products, as well as debt and mortgage-related securities. The company was founded in 1899 and is headquartered in Gulfport, Mississippi.

About Enterprise Financial Services

Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.