Analyzing Prosperity Bancshares (PRSP) & Its Peers

Prosperity Bancshares (NASDAQ: PRSP) is one of 210 public companies in the “Commercial Banks” industry, but how does it contrast to its peers? We will compare Prosperity Bancshares to similar businesses based on the strength of its risk, profitability, earnings, analyst recommendations, institutional ownership, dividends and valuation.

Insider and Institutional Ownership

46.1% of shares of all “Commercial Banks” companies are owned by institutional investors. 11.7% of shares of all “Commercial Banks” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Prosperity Bancshares and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prosperity Bancshares 0 0 0 0 N/A
Prosperity Bancshares Competitors 360 2856 2309 66 2.37

As a group, “Commercial Banks” companies have a potential upside of 8.20%. Given Prosperity Bancshares’ peers higher probable upside, analysts clearly believe Prosperity Bancshares has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares Prosperity Bancshares and its peers top-line revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Prosperity Bancshares N/A N/A 16.38
Prosperity Bancshares Competitors $343.38 million $72.34 million 21.05

Prosperity Bancshares’ peers have higher revenue and earnings than Prosperity Bancshares. Prosperity Bancshares is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Profitability

This table compares Prosperity Bancshares and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prosperity Bancshares 36.72% 7.25% 1.23%
Prosperity Bancshares Competitors 20.68% 8.67% 0.93%

Volatility & Risk

Prosperity Bancshares has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Prosperity Bancshares’ peers have a beta of 0.75, meaning that their average stock price is 25% less volatile than the S&P 500.

Summary

Prosperity Bancshares peers beat Prosperity Bancshares on 5 of the 8 factors compared.

About Prosperity Bancshares

Prosperity Bancshares, Inc. is a financial holding company, which operates through its bank subsidiary, Prosperity Bank (the Bank). The Bank provides a range of financial products and services to small and medium-sized businesses and consumers. The Company, through the Bank, offers a range of loan and deposit products to its customers. At December 31, 2016, the Bank maintained approximately 598,400 separate deposit accounts including certificates of deposit and 53,600 separate loan accounts. It offered commercial real estate (including multifamily residential) and one- to four-family residential loans, as of December 31, 2016. As of December 31, 2016, the Bank operated 245 full service banking locations; 65 in the Houston area; 29 in the South Texas area; 36 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area; 34 in the West Texas area; 16 in the Bryan/College Station area, six in the Central Oklahoma area and eight in the Tulsa, Oklahoma area.

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