Cullen/Frost Bankers (NYSE:CFR) vs. Pathward Financial (NASDAQ:CASH) Financial Comparison

Cullen/Frost Bankers (NYSE:CFR) and Pathward Financial (NASDAQ:CASH) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitability, analyst recommendations, earnings and valuation.

Volatility & Risk

Cullen/Frost Bankers has a beta of 0.99, suggesting that its stock price is 1% less volatile than the S&P 500. Comparatively, Pathward Financial has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Profitability

This table compares Cullen/Frost Bankers and Pathward Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cullen/Frost Bankers	20.44%	15.95%	1.17%
Pathward Financial	21.91%	22.02%	2.28%

Dividends

Cullen/Frost Bankers pays an annual dividend of $3.80 per share and has a dividend yield of 2.9%. Pathward Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. Cullen/Frost Bankers pays out 42.8% of its earnings in the form of a dividend. Pathward Financial pays out 2.9% 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. Cullen/Frost Bankers has raised its dividend for 31 consecutive years. Cullen/Frost Bankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings for Cullen/Frost Bankers and Pathward Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cullen/Frost Bankers	3	8	2	0	1.92
Pathward Financial	0	1	1	0	2.50

Cullen/Frost Bankers presently has a consensus target price of $132.54, indicating a potential upside of 2.53%. Pathward Financial has a consensus target price of $90.50, indicating a potential upside of 23.89%. Given Pathward Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Pathward Financial is more favorable than Cullen/Frost Bankers.

Valuation and Earnings

This table compares Cullen/Frost Bankers and Pathward Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cullen/Frost Bankers	$2.06 billion	4.02	$582.54 million	$8.87	14.57
Pathward Financial	$600.62 million	2.90	$168.36 million	$6.86	10.65

Cullen/Frost Bankers has higher revenue and earnings than Pathward Financial. Pathward Financial is trading at a lower price-to-earnings ratio than Cullen/Frost Bankers, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

86.9% of Cullen/Frost Bankers shares are held by institutional investors. Comparatively, 92.7% of Pathward Financial shares are held by institutional investors. 2.9% of Cullen/Frost Bankers shares are held by company insiders. Comparatively, 1.2% of Pathward Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Cullen/Frost Bankers beats Pathward Financial on 10 of the 17 factors compared between the two stocks.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that provides commercial and consumer banking services in Texas. The company offers commercial banking services to corporations, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; and treasury management services, as well as originates commercial leasing services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, first mortgage loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds transmitting, and foreign exchange services; correspondent banking activities, including check clearing, transfer of funds, fixed income security services, and securities custody and clearance services. Further, it offers trust, investment, agency, and custodial services for individual and corporate clients; capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and support for international business activities, including foreign exchange, letters of credit, export-import financing, and other related activities. Additionally, the company offers insurance and securities brokerage services; holding of securities for investment purposes; and investment management services for mutual funds, institutions, and individuals. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. The company was founded in 1868 and is headquartered in San Antonio, Texas.

About Pathward Financial

Pathward Financial, Inc. operates as the bank holding company for Pathward, National Association that provides various banking products and services in the United States. The company operates through three segments: Consumer, Commercial, and Corporate Services/Other. It offers demand deposit accounts, savings accounts, and money market savings accounts. The company also provides commercial finance product comprising term lending, asset-based lending, factoring, lease financing, insurance premium finance, government guaranteed lending, and other commercial finance products; consumer credit products; other consumer financing services; tax services, which includes short-term refund advance loans and short-term electronic return originator advance loans; and warehouse financing services. In addition, it issues prepaid cards; and offers payment solutions, such as acceptance, processing, and settlement of credit card and debit card payments. The company was formerly known as Meta Financial Group, Inc. and changed its name to Pathward Financial, Inc. in July 2022. Pathward Financial, Inc. was founded in 1954 and is based in Sioux Falls, South Dakota.