Critical Analysis: Trustmark (NASDAQ:TRMK) & Pinnacle Financial Partners (NASDAQ:PNFP)

Pinnacle Financial Partners (NASDAQ:PNFP) and Trustmark (NASDAQ:TRMK) are both mid-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Risk & Volatility

Pinnacle Financial Partners has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Trustmark has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pinnacle Financial Partners	13.97%	8.89%	1.07%
Trustmark	17.62%	9.48%	0.92%

Analyst Ratings

This is a summary of current ratings and price targets for Pinnacle Financial Partners and Trustmark, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinnacle Financial Partners	0	7	4	0	2.36
Trustmark	0	4	1	0	2.20

Pinnacle Financial Partners presently has a consensus target price of $113.64, suggesting a potential downside of 3.45%. Trustmark has a consensus target price of $35.20, suggesting a potential downside of 6.23%. Given Pinnacle Financial Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Pinnacle Financial Partners is more favorable than Trustmark.

Earnings and Valuation

This table compares Pinnacle Financial Partners and Trustmark”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pinnacle Financial Partners	$2.79 billion	3.26	$562.15 million	$5.26	22.38
Trustmark	$488.64 million	4.70	$165.49 million	$3.31	11.34

Pinnacle Financial Partners has higher revenue and earnings than Trustmark. Trustmark is trading at a lower price-to-earnings ratio than Pinnacle Financial Partners, 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, 67.6% of Trustmark shares are owned by institutional investors. 1.9% of Pinnacle Financial Partners shares are owned by company insiders. Comparatively, 1.5% of Trustmark shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Pinnacle Financial Partners pays an annual dividend of $0.88 per share and has a dividend yield of 0.7%. Trustmark pays an annual dividend of $0.92 per share and has a dividend yield of 2.5%. Pinnacle Financial Partners pays out 16.7% of its earnings in the form of a dividend. Trustmark pays out 27.8% 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.

Summary

Pinnacle Financial Partners beats Trustmark on 12 of the 16 factors compared between the two stocks.

About Pinnacle Financial Partners

Pinnacle Financial Partners, Inc., together with its subsidiaries, 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. The company accepts various deposits, including savings, noninterest-bearing and interest-bearing checking, money market, and certificate of deposit accounts; and provides treasury management services, which includes online wire origination, enhanced ACH origination services, positive pay, zero balance and sweep accounts, automated bill pay services, electronic receivables processing, lockbox processing, and merchant card acceptance services. It offers equipment and working capital loans; commercial real estate loans comprising investment properties and business loans; secured and unsecured loans, such as 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. The company also provides investment products; brokerage and investment advisory programs; and fiduciary and investment services, such as personal trust, investment management, estate administration, endowments, foundations, individual retirement accounts, escrow services, and custody. In addition, it offers insurance agency services primarily in the property and casualty area; merger and acquisition advisory services; and private debt, equity and mezzanine, and other middle-market advisory services. Further, the company provides telephone and online banking, mobile banking, debit and credit 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 Trustmark

Trustmark Corporation operates as the bank holding company for Trustmark National Bank that provides banking and other financial solutions to individuals and corporate institutions in the United States. The company operates through three segments: General Banking, Wealth Management, and Insurance. It offers checking, savings, and money market accounts; certificates of deposits and individual retirement accounts; financing for commercial and industrial projects, income-producing commercial real estate, owner-occupied real estate, and construction and land development; and installment and real estate loans, and lines of credit, as well as treasury management services. The company also provides mortgage banking services, including construction financing, production of conventional and government-insured mortgages, and secondary marketing and mortgage servicing. In addition, it provides wealth management and trust services, such as administration of personal trusts and estates; management of investment accounts for individuals, employee benefit plans, and charitable foundations; and corporate trust and institutional custody, securities brokerage, financial and estate planning, retirement plan, and investment management services. Further, the company offers business insurance products and services for medical professionals, construction, manufacturing, hospitality, real estate, and group life and health plans; and life and health insurance, and personal line policies for individual customers. Trustmark Corporation was founded in 1889 and is headquartered in Jackson, Mississippi.