Head-To-Head Comparison: Hawthorn Bancshares (NASDAQ:HWBK) vs. Cullen/Frost Bankers (NYSE:CFR)

Hawthorn Bancshares (NASDAQ:HWBK) and Cullen/Frost Bankers (NYSE:CFR) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Profitability

This table compares Hawthorn Bancshares and Cullen/Frost Bankers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hawthorn Bancshares	16.65%	13.00%	1.00%
Cullen/Frost Bankers	20.44%	15.95%	1.17%

Institutional & Insider Ownership

30.7% of Hawthorn Bancshares shares are owned by institutional investors. Comparatively, 86.9% of Cullen/Frost Bankers shares are owned by institutional investors. 23.4% of Hawthorn Bancshares shares are owned by company insiders. Comparatively, 2.9% of Cullen/Frost Bankers 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.

Valuation and Earnings

This table compares Hawthorn Bancshares and Cullen/Frost Bankers”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hawthorn Bancshares	$72.91 million	2.73	$18.26 million	$2.61	10.92
Cullen/Frost Bankers	$2.06 billion	3.82	$582.54 million	$8.87	13.83

Cullen/Frost Bankers has higher revenue and earnings than Hawthorn Bancshares. Hawthorn Bancshares 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.

Analyst Ratings

This is a summary of current recommendations and price targets for Hawthorn Bancshares and Cullen/Frost Bankers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hawthorn Bancshares	0	0	0	0	0.00
Cullen/Frost Bankers	3	8	2	0	1.92

Cullen/Frost Bankers has a consensus target price of $132.77, suggesting a potential upside of 8.26%. Given Cullen/Frost Bankers’ stronger consensus rating and higher probable upside, analysts clearly believe Cullen/Frost Bankers is more favorable than Hawthorn Bancshares.

Dividends

Hawthorn Bancshares pays an annual dividend of $0.76 per share and has a dividend yield of 2.7%. Cullen/Frost Bankers pays an annual dividend of $3.80 per share and has a dividend yield of 3.1%. Hawthorn Bancshares pays out 29.1% of its earnings in the form of a dividend. Cullen/Frost Bankers pays out 42.8% 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. 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.

Volatility and Risk

Hawthorn Bancshares has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500. Comparatively, Cullen/Frost Bankers has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500.

Summary

Cullen/Frost Bankers beats Hawthorn Bancshares on 15 of the 17 factors compared between the two stocks.

About Hawthorn Bancshares

Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.

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.