NYSE:CADE

Stock Analysis Report

Cadence Bancorporation

Executive Summary

Cadence Bancorporation, a financial holding company, through its subsidiary, Cadence Bank, National Association, provides commercial banking products and services to middle-market commercial businesses, high net worth individuals, business owners, and retail customers in the United States.

Rewards

Trading at 53.1% below its fair value

Earnings are forecast to grow 9.04% per year

Earnings grew by 21.6% over the past year

Risk Analysis

Shareholders have been substantially diluted in the past year

Unstable dividend track record



Snowflake Analysis

Undervalued with excellent balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Cadence Bancorporation's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CADE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.7%

CADE

0.5%

US Banks

1.5%

US Market


1 Year Return

-18.3%

CADE

12.1%

US Banks

20.1%

US Market

Return vs Industry: CADE underperformed the US Banks industry which returned 12.1% over the past year.

Return vs Market: CADE underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

CADEIndustryMarket
7 Day1.7%0.5%1.5%
30 Day-8.0%-1.3%1.4%
90 Day1.5%1.2%8.7%
1 Year-14.1%-18.3%15.4%12.1%22.7%20.1%
3 Yearn/a25.2%16.2%50.1%40.5%
5 Yearn/a75.9%55.9%73.1%54.1%

Price Volatility Vs. Market

How volatile is Cadence Bancorporation's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cadence Bancorporation undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CADE ($16.55) is trading below our estimate of fair value ($35.26)

Significantly Below Fair Value: CADE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: CADE is good value based on its PE Ratio (10.6x) compared to the Banks industry average (12.6x).

PE vs Market: CADE is good value based on its PE Ratio (10.6x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: CADE is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: CADE is good value based on its PB Ratio (0.9x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is Cadence Bancorporation forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

9.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CADE's forecast earnings growth (9% per year) is above the savings rate (1.7%).

Earnings vs Market: CADE's earnings (9% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: CADE's earnings are forecast to grow, but not significantly.

Revenue vs Market: CADE's revenue (7.4% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: CADE's revenue (7.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CADE's Return on Equity is forecast to be low in 3 years time (9.5%).


Next Steps

Past Performance

How has Cadence Bancorporation performed over the past 5 years?

34.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CADE has high quality earnings.

Growing Profit Margin: CADE's current net profit margins (30.1%) are lower than last year (35.4%).


Past Earnings Growth Analysis

Earnings Trend: CADE's earnings have grown significantly by 34% per year over the past 5 years.

Accelerating Growth: CADE's earnings growth over the past year (21.6%) is below its 5-year average (34% per year).

Earnings vs Industry: CADE earnings growth over the past year (21.6%) exceeded the Banks industry 12.1%.


Return on Equity

High ROE: CADE's Return on Equity (8.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cadence Bancorporation's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: CADE has a low level of unsold assets or inventory.

Debt Coverage by Assets: CADE's debt is covered by short term assets (assets are 3.7x debt).


Financial Institutions Analysis

Asset Level: CADE's level of assets compared to its equity is low.

Allowance for Bad Loans: CADE has a low allowance for bad loans.

Low Risk Liabilities: CADE's liabilities are made up of primarily low risk sources of funding.

Loan Level: CADE has an acceptable proportion of non-loan assets held.

Low Risk Deposits: CADE's loans are broadly funded by customer deposits.

Level of Bad Loans: CADE has an appropriate level of bad loans (0.96%)


Next Steps

Dividend

What is Cadence Bancorporation's current dividend yield, its reliability and sustainability?

4.23%

Current Dividend Yield


Dividend Yield vs Market

company4.2%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years4.4%

Current dividend yield vs market & industry

Notable Dividend: CADE's dividend (4.23%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: CADE's dividend (4.23%) is in the top 25% of dividend payers in the US market (3.69%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, CADE has been paying a dividend for less than 10 years.

Growing Dividend: CADE's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (44.7%), CADE's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CADE's dividends in 3 years are forecast to be well covered by earnings (43% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.1yrs

Average management tenure


CEO

Paul Murphy (59yo)

10.1yrs

Tenure

US$5,093,572

Compensation

Mr. Paul B. Murphy Jr., has been the Chairman and Chief Executive Officer of Cadence Bancorporation (formerly, Cadence Financial Corp.) since 2010 and he serves as its Director since 2010. Mr. Murphy serve ...


CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD5.09M) is above average for companies of similar size in the US market ($USD3.76M).

Compensation vs Earnings: Paul's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Paul Murphy
Chairman & CEO10.1yrsUS$5.09m0.31% $6.6m
Samuel Tortorici
President9.1yrsUS$3.38m0.077% $1.6m
Valerie Toalson
Executive VP & CFO7.1yrsUS$2.53m0.019% $408.8k
Jerry Powell
Executive VP9.1yrsUS$626.21k0.015% $319.5k
Rudolph Holmes
Executive Vice President4.1yrsUS$2.74m0.022% $464.8k
Jack Schultz
Executive Vice President4.1yrsno data0.0094% $198.5k
Sheila Ray
Executive Vice President0yrsno data0.032% $669.2k
David Black
Executive Vice President0yrsno data0.021% $437.3k

8.1yrs

Average Tenure

56yo

Average Age

Experienced Management: CADE's management team is seasoned and experienced (8.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Paul Murphy
Chairman & CEO10.1yrsUS$5.09m0.31% $6.6m
William Harrison
Lead Director0yrsUS$115.00k0.53% $11.1m
Marc J. Shapiro
Independent Director1.8yrsUS$50.00k0.30% $6.2m
Scott Stuart
Independent Director3.1yrsno data0.64% $13.5m
Joseph Evans
Vice Chairman1.1yrsno data0.35% $7.3m
J. Wiley
Director0yrsno data0.37% $7.9m
J. Fredericks
Independent Director3.1yrsUS$100.00k0.090% $1.9m
Stanley Levy
Advisory Director3.1yrsno data0.058% $1.2m
Precious Owodunni
Independent Director0.9yrsno data0.0021% $43.5k
Virginia Hepner
Independent Director1.1yrsno data0.010% $211.6k

2.4yrs

Average Tenure

64yo

Average Age

Experienced Board: CADE's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CADE insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 54.3%.


Top Shareholders

Company Information

Cadence Bancorporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cadence Bancorporation
  • Ticker: CADE
  • Exchange: NYSE
  • Founded: 1885
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$2.112b
  • Shares outstanding: 127.60m
  • Website: https://www.cadencebank.com

Number of Employees


Location

  • Cadence Bancorporation
  • 2800 Post Oak Boulevard
  • Suite 3800
  • Houston
  • Texas
  • 77056
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CADENYSE (New York Stock Exchange)YesClass A Common StockUSUSDApr 2017
729DB (Deutsche Boerse AG)YesClass A Common StockDEEURApr 2017

Biography

Cadence Bancorporation, a financial holding company, through its subsidiary, Cadence Bank, National Association, provides commercial banking products and services to middle-market commercial businesses, high net worth individuals, business owners, and retail customers in the United States. The company operates through Banking and Financial Services segments. It offers checking, savings, money market, and other deposit accounts. The company also provides commercial and industrial, and commercial and residential real estate loans; other consumer loans, such as home equity, auto, boat, and personal installment loans; and shared national credits. In addition, it offers wealth management and other fiduciary, and private banking services under the Linscomb & Williams and Cadence Trust brands. Further, the company provides life, disability, and long-term care insurance products, as well as buy-sell agreements to retail and commercial customers under the Cadence Investment Services brand through financial consultants and advisors, and third party partners, as well as directly. Additionally, it offers correspondent banking products and services comprising treasury and liquidity management, Fed funds accommodation, wholesale mortgage, and commercial real estate participation services for financial institutions; and payroll and human resources services, payroll cards, and employee health insurance products. The company also provides debit and credit cards; treasury management and merchant services; employee and payroll benefit solutions; and automated clearing house, lock-box, remote deposit capture, foreign exchange, and other treasury services, as well as online, mobile, and telephone banking services. As of December 31, 2018, it operated 66 branch offices in Texas, Alabama, Florida, Mississippi, and Tennessee; and 32 branches throughout Georgia. The company also serves through ATMs and ITMs. Cadence Bancorporation was founded in 1885 and is headquartered in Houston, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 01:01
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.