Analyzing Trustmark Corporation (TRMK) & Capstar Financial Holdings (CSTR)

Trustmark Corporation (NASDAQ: TRMK) and Capstar Financial Holdings (NASDAQ:CSTR) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Earnings and Valuation

This table compares Trustmark Corporation and Capstar Financial Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Trustmark Corporation $569.20 million 3.95 $115.16 million $1.70 19.53
Capstar Financial Holdings $36.95 million 6.12 $2.25 million $0.20 100.65

Trustmark Corporation has higher revenue and earnings than Capstar Financial Holdings. Trustmark Corporation is trading at a lower price-to-earnings ratio than Capstar Financial Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations and price targets for Trustmark Corporation and Capstar Financial Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trustmark Corporation 0 4 0 0 2.00
Capstar Financial Holdings 0 5 0 0 2.00

Trustmark Corporation presently has a consensus target price of $33.50, suggesting a potential upside of 0.90%. Capstar Financial Holdings has a consensus target price of $18.50, suggesting a potential downside of 8.10%. Given Trustmark Corporation’s higher possible upside, equities research analysts plainly believe Trustmark Corporation is more favorable than Capstar Financial Holdings.

Profitability

This table compares Trustmark Corporation and Capstar Financial Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trustmark Corporation 18.35% 8.04% 0.92%
Capstar Financial Holdings 3.40% 7.70% 0.79%

Dividends

Trustmark Corporation pays an annual dividend of $0.92 per share and has a dividend yield of 2.8%. Capstar Financial Holdings does not pay a dividend. Trustmark Corporation pays out 54.1% of its earnings in the form of a dividend.

Insider and Institutional Ownership

62.4% of Trustmark Corporation shares are held by institutional investors. Comparatively, 35.4% of Capstar Financial Holdings shares are held by institutional investors. 1.4% of Trustmark Corporation shares are held by insiders. Comparatively, 19.3% of Capstar Financial Holdings shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Trustmark Corporation beats Capstar Financial Holdings on 9 of the 13 factors compared between the two stocks.

About Trustmark Corporation

Trustmark Corporation is a bank holding company. The Company’s principal subsidiary is Trustmark National Bank (TNB). Through TNB and its subsidiaries, the Company operates as a financial services company providing banking and other financial solutions. It operates through three segments: General Banking, Wealth Management and Insurance. The General Banking Division is responsible for all traditional banking products and services, including loans and deposits. The Wealth Management Division provides customized solutions for customers by integrating financial services with traditional banking products and services, such as money management, full-service brokerage, financial planning, personal and institutional trust and retirement services. Through Fisher Brown Bottrell Insurance, Inc. (FBBI), a subsidiary of TNB, the Insurance Division provides a range of retail insurance products, including commercial risk management products, bonding, group benefits and personal lines coverage.

About Capstar Financial Holdings

CapStar Financial Holdings, Inc. is a bank holding company. The Company operates primarily through its subsidiary, CapStar Bank. CapStar Bank is a commercial bank. The Company’s lines of business include commercial and industrial, commercial real estate, healthcare, correspondent banking, personal and private banking and wealth management, and mortgage banking. Its products and services include commercial and industrial loans to small and medium sized businesses, with a particular focus on businesses operating in the healthcare industry; commercial real estate loans; private banking and wealth management services for the owners and operators of business clients and other high net worth individuals, and correspondent banking services. As of June 30, 2016, the Company had seven locations, five of which are retail bank branches and two of which are mortgage origination offices.

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