Financial Analysis: Pinnacle Financial Partners (NYSE:PNFP) vs. SmartFinancial (NASDAQ:SMBK)
by Sarita Garza · The Markets DailySmartFinancial (NASDAQ:SMBK – Get Free Report) and Pinnacle Financial Partners (NYSE:PNFP – Get Free Report) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.
Dividends
SmartFinancial pays an annual dividend of $0.32 per share and has a dividend yield of 0.8%. Pinnacle Financial Partners pays an annual dividend of $2.00 per share and has a dividend yield of 2.3%. SmartFinancial pays out 10.7% of its earnings in the form of a dividend. Pinnacle Financial Partners pays out 24.7% 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. SmartFinancial has raised its dividend for 3 consecutive years and Pinnacle Financial Partners has raised its dividend for 1 consecutive years.
Valuation & Earnings
This table compares SmartFinancial and Pinnacle Financial Partners”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SmartFinancial | $196.50 million | 3.45 | $36.14 million | $2.98 | 13.30 |
| Pinnacle Financial Partners | $3.32 billion | 2.05 | $641.86 million | $8.09 | 10.82 |
Pinnacle Financial Partners has higher revenue and earnings than SmartFinancial. Pinnacle Financial Partners is trading at a lower price-to-earnings ratio than SmartFinancial, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares SmartFinancial and Pinnacle Financial Partners’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SmartFinancial | 12.67% | 7.33% | 0.71% |
| Pinnacle Financial Partners | 19.41% | 10.10% | 1.19% |
Institutional & Insider Ownership
58.8% of SmartFinancial shares are owned by institutional investors. Comparatively, 87.4% of Pinnacle Financial Partners shares are owned by institutional investors. 7.6% of SmartFinancial shares are owned by company insiders. Comparatively, 1.5% of Pinnacle Financial Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Risk and Volatility
SmartFinancial has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Pinnacle Financial Partners has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.
Analyst Recommendations
This is a breakdown of current ratings and target prices for SmartFinancial and Pinnacle Financial Partners, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SmartFinancial | 0 | 4 | 1 | 1 | 2.50 |
| Pinnacle Financial Partners | 0 | 8 | 10 | 1 | 2.63 |
SmartFinancial presently has a consensus price target of $40.50, indicating a potential upside of 2.15%. Pinnacle Financial Partners has a consensus price target of $112.24, indicating a potential upside of 28.17%. Given Pinnacle Financial Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Pinnacle Financial Partners is more favorable than SmartFinancial.
Summary
Pinnacle Financial Partners beats SmartFinancial on 12 of the 17 factors compared between the two stocks.
About SmartFinancial
SmartFinancial, Inc. operates as the bank holding company for SmartBank that provides various financial services to individuals and corporate customers in Tennessee, Alabama, and Florida. It operates through Commercial Real Estate, Consumer Real Estate, Construction and Land Development, Commercial and Industrial, Leases, and Consumer and Other segments. The company offers noninterest-bearing and interest-bearing checking, interest-bearing demand, savings, money market, time deposit, individual retirement accounts, as well as certificates of deposit. It also provides commercial and residential real estate, consumer real estate, and construction and land development loans; commercial and financial loans and leases; commercial business and mortgage loans; and direct consumer installment, educational, agriculture, and other revolving credit loans; equipment financing, heavy equipment, semis, and trailers loans and leases to small and mid-size companies; letters of credit; and overdraft facilities. In addition, the company offers wealth management, insurance, mortgage origination, and internet and mobile banking services. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.
About Pinnacle Financial Partners
Pinnacle Financial Partners, Inc. 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. It accepts various deposits, including savings, noninterest-bearing and interest-bearing checking, money market, and certificate of deposit accounts; and provides treasury management services, such as online wire origination, enhanced ACH origination, positive pay, zero balance and sweep accounts, automated bill pay services, electronic receivables processing, lockbox processing, and merchant card acceptance services, small business and commercial credit cards corporate purchasing cards, and virtual accounting/deposit escrow solutions. The company also offers equipment and working capital loan; commercial real estate loans, such as investment properties and business loan; secured and unsecured loans comprising 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. In addition, the company provides investment products; brokerage and investment advisory programs; and fiduciary and investment services, including personal trust, investment management, estate administration, endowments, foundations, individual retirement accounts, escrow services, and custody. Further, it offers insurance agency services in the property and casualty area; investment, merger and acquisition advisory services, private debt, equity and mezzanine, and other middle-market advisory services; and other banking services, including telephone and online banking, mobile banking, debit 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.