Analyzing Veritex (NASDAQ:VBTX) and Texas Capital Bancshares (NASDAQ:TCBI)

Texas Capital Bancshares (NASDAQ:TCBI) and Veritex (NASDAQ:VBTX) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, profitability, risk, analyst recommendations, valuation and dividends.

Earnings and Valuation

This table compares Texas Capital Bancshares and Veritex”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Texas Capital Bancshares	$894.52 million	3.99	$189.14 million	$0.18	429.17
Veritex	$426.61 million	3.41	$108.26 million	$1.56	17.12

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

Profitability

This table compares Texas Capital Bancshares and Veritex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Texas Capital Bancshares	1.40%	8.06%	0.79%
Veritex	11.11%	7.79%	0.95%

Insider and Institutional Ownership

96.9% of Texas Capital Bancshares shares are held by institutional investors. Comparatively, 88.3% of Veritex shares are held by institutional investors. 1.0% of Texas Capital Bancshares shares are held by company insiders. Comparatively, 4.6% of Veritex shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Texas Capital Bancshares has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Veritex has a beta of 1.38, indicating that its stock price is 38% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Texas Capital Bancshares and Veritex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Texas Capital Bancshares	4	8	4	0	2.00
Veritex	0	2	2	1	2.80

Texas Capital Bancshares currently has a consensus price target of $74.69, indicating a potential downside of 3.32%. Veritex has a consensus price target of $29.40, indicating a potential upside of 10.11%. Given Veritex’s stronger consensus rating and higher possible upside, analysts plainly believe Veritex is more favorable than Texas Capital Bancshares.

Summary

Veritex beats Texas Capital Bancshares on 8 of the 15 factors compared between the two stocks.

About Texas Capital Bancshares

Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. The company offers commercial banking; consumer banking; investment banking solutions, including capital markets, mergers and acquisitions, and syndicated finance, as well as financial sponsor coverage, capital solutions, and institutional services; and wealth management services, such as investment management, financial planning, lockbox and insurance, securities-based lending, estate planning, and business succession, as well as philanthropic, trustee and executor, custom credit, and depository services. It also provides deposit accounts, analyzed accounts, commercial card, SBA and business loans, packaged solutions, and merchant services; liquidity and investments, working capital, international trade and payment, and treasury and credit products; and commercial real estate, homebuilder and community, and mortgage finance. In addition, the company offers payables and receivables management; online and mobile banking; term loans and lines of credit, equipment finance and lease, acquisition finance, and asset-based lending; private wealth advisory solutions; and checking and savings accounts, debit and credit cards, and certificates of deposit, as well as ETF and funds management services. Further, it provides financial institution money market accounts and loan syndication products; commercial loans for financing for working capital, organic growth, and acquisitions; real estate term and construction loans; mortgage warehouse lending services; treasury management, trust, and advisory and escrow services; and letters of credit. The company operates in Austin, Dallas, Fort Worth, Houston, and San Antonio metropolitan areas of Texas. Texas Capital Bancshares, Inc. was incorporated in 1996 and is headquartered in Dallas, Texas.

About Veritex

Veritex Holdings, Inc. operates as the bank holding company for Veritex Community Bank that provides various commercial banking products and services to small and medium-sized businesses, and professionals. The company accepts deposit products include demand, savings, money market, and time accounts. Its loan products include commercial real estate and general commercial, mortgage warehouse loans, residential real estate, construction and land, farmland, paycheck protection program, 1-4 family residential, agricultural, multi-family residential, and consumer loans, as well as purchased receivables financing. The company also provides interest rate swap services; and a range of online banking solutions, such as access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and ATMs, as well as mobile banking, mail, and personal appointment. In addition, it offers debit cards, night depository services, direct deposits, cashier’s checks, and letters of credit; treasury management services, including balance reporting, transfers between accounts, wire transfer initiation, automated clearinghouse origination, and stop payments; and cash management deposit products and services consisting of lockbox, remote deposit capture, positive pay, reverse positive pay, account reconciliation services, zero balance accounts, and sweep accounts. The company operates full-service branches located in the Dallas-Fort Worth metroplex, and the Houston metropolitan area. Veritex Holdings, Inc. was incorporated in 2009 and is headquartered in Dallas, Texas.