Cadence Bank (NYSE:CADE) and LINKBANCORP (NASDAQ:LNKB) Critical Review

Cadence Bank (NYSE:CADE) and LINKBANCORP (NASDAQ:LNKB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Volatility and Risk

Cadence Bank has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500. Comparatively, LINKBANCORP has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.

Insider and Institutional Ownership

84.6% of Cadence Bank shares are owned by institutional investors. Comparatively, 37.5% of LINKBANCORP shares are owned by institutional investors. 2.2% of Cadence Bank shares are owned by insiders. Comparatively, 35.8% of LINKBANCORP shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Cadence Bank pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. LINKBANCORP pays an annual dividend of $0.30 per share and has a dividend yield of 3.9%. Cadence Bank pays out 28.7% of its earnings in the form of a dividend. LINKBANCORP pays out -428.6% 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. Cadence Bank has increased its dividend for 13 consecutive years. LINKBANCORP is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Cadence Bank and LINKBANCORP”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cadence Bank	$921.95 million	6.74	$542.30 million	$3.48	9.79
LINKBANCORP	$96.11 million	3.00	-$11.97 million	($0.07)	-110.29

Cadence Bank has higher revenue and earnings than LINKBANCORP. LINKBANCORP is trading at a lower price-to-earnings ratio than Cadence Bank, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Cadence Bank and LINKBANCORP, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cadence Bank	0	4	7	1	2.75
LINKBANCORP	0	1	0	0	2.00

Cadence Bank presently has a consensus price target of $36.88, indicating a potential upside of 8.20%. LINKBANCORP has a consensus price target of $7.50, indicating a potential downside of 2.85%. Given Cadence Bank’s stronger consensus rating and higher possible upside, analysts plainly believe Cadence Bank is more favorable than LINKBANCORP.

Profitability

This table compares Cadence Bank and LINKBANCORP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cadence Bank	25.99%	8.95%	0.95%
LINKBANCORP	3.65%	7.86%	0.76%

Summary

Cadence Bank beats LINKBANCORP on 15 of the 18 factors compared between the two stocks.

About Cadence Bank

Cadence Bank provides commercial banking and financial services. Its products and services include consumer banking, consumer loans, mortgages, home equity lines and loans, credit cards, commercial and business banking, treasury management, specialized and asset-based lending, commercial real estate, equipment financing, and correspondent banking services. The company’s products and services also comprise small business administration lending, foreign exchange, wealth management, investment and trust, financial planning, retirement plan management, and personal and business insurance services. Cadence Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.

About LINKBANCORP

LINKBANCORP, Inc. operates as a bank holding company for The Gratz Bank, that provides various banking products and services to individuals, families, nonprofit, and business customers in Pennsylvania. Its deposit products include demand, saving, and money market accounts, as well as certificates of deposits. The company also offers commercial real estate, commercial business, commercial real estate construction, land development, residential real estate, home equity, consumer, agricultural, and municipal loans. It also provides online banking, mobile banking, direct and remote deposit, and cash management services. The company was incorporated in 2018 and is headquartered in Camp Hill, Pennsylvania.