NYSE:PB

Stock Analysis Report

Prosperity Bancshares

Executive Summary

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides retail and commercial banking services to small and medium-sized businesses, and consumers.

Rewards

Trading at 25.3% below its fair value

Earnings are forecast to grow 20.83% per year

Earnings have grown 2.6% per year over the past 5 years

Pays a high and reliable dividend of 2.49%

Risk Analysis

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet, undervalued and pays a dividend.


Similar Companies

Share Price & News

How has Prosperity Bancshares's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

2.0%

PB

0.5%

US Banks

1.5%

US Market


1 Year Return

-0.6%

PB

12.1%

US Banks

20.1%

US Market

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

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


Shareholder returns

PBIndustryMarket
7 Day2.0%0.5%1.5%
30 Day4.7%-1.3%1.4%
90 Day7.5%1.2%8.7%
1 Year1.8%-0.6%15.4%12.1%22.7%20.1%
3 Year5.5%-1.1%25.2%16.2%50.1%40.5%
5 Year59.7%43.1%75.9%55.9%73.1%54.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Prosperity Bancshares undervalued compared to its fair value and its price relative to the market?

25.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PB ($74) is trading below our estimate of fair value ($99.05)

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


Price To Earnings Ratio

PE vs Industry: PB is poor value based on its PE Ratio (16.4x) compared to the Banks industry average (12.6x).

PE vs Market: PB is good value based on its PE Ratio (16.4x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: PB is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

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


Next Steps

Future Growth

How is Prosperity Bancshares forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

20.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PB's forecast earnings growth (20.8% per year) is above the savings rate (1.7%).

Earnings vs Market: PB's earnings (20.8% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: PB's revenue (13.6% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: PB's revenue (13.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PB's Return on Equity is forecast to be low in 3 years time (8.6%).


Next Steps

Past Performance

How has Prosperity Bancshares performed over the past 5 years?

2.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PB has high quality earnings.

Growing Profit Margin: PB's current net profit margins (40.8%) are lower than last year (44.1%).


Past Earnings Growth Analysis

Earnings Trend: PB's earnings have grown by 2.6% per year over the past 5 years.

Accelerating Growth: PB's earnings growth over the past year (3.3%) exceeds its 5-year average (2.6% per year).

Earnings vs Industry: PB earnings growth over the past year (3.3%) underperformed the Banks industry 12.1%.


Return on Equity

High ROE: PB's Return on Equity (5.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Prosperity Bancshares'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: PB has a low level of unsold assets or inventory.

Debt Coverage by Assets: PB's debt is not covered by short term assets (assets are 0.4x debt).


Financial Institutions Analysis

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

Allowance for Bad Loans: PB has a sufficient allowance for bad loans.

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

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

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

Level of Bad Loans: PB has an appropriate level of bad loans (0.3%)


Next Steps

Dividend

What is Prosperity Bancshares's current dividend yield, its reliability and sustainability?

2.49%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Prosperity Bancshares before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.5%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years2.6%

Current dividend yield vs market & industry

Notable Dividend: PB's dividend (2.49%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: PB's dividend (2.49%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: PB's dividends per share have been stable in the past 10 years.

Growing Dividend: PB's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.4%), PB's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PB's dividends in 3 years are forecast to be well covered by earnings (35.5% payout ratio).


Next Steps

Management

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

7.8yrs

Average management tenure


CEO

David Zalman (62yo)

19.1yrs

Tenure

US$4,879,348

Compensation

Mr. David E. Zalman serves as the Senior Chairman of Prosperity Bancshares Inc. since November 1, 2019. He served as the Chairman of Prosperity Bancshares Inc. since 2001 until November 1, 2019 and also it ...


CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD4.88M) is about average for companies of similar size in the US market ($USD6.26M).

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


Leadership Team

NamePositionTenureCompensationOwnership
David Zalman
Senior Chairman & CEO19.1yrsUS$4.88m0.82% $57.8m
Charlotte Rasche
Executive VP & General Counsel7.8yrsUS$1.51m0.038% $2.6m
Kevin Hanigan
President0.3yrsno data0.17% $12.1m
Asylbek Osmonov
Chief Financial Officer0.8yrsno data0.0065% $458.5k
Lori Wakefield
Senior Vice President of Prosperity Bank15.5yrsno datano data
Mike Reaves
Senior Vice President of Prosperity Bank15.5yrsno datano data
Denny Buchanan
Senior Vice President of Prosperity Bank15.5yrsno datano data
Robert Dowdell
Executive Vice President1yrsno data0.023% $1.6m
Annette Tripp
Senior VP & Associate General Counsel0yrsno datano data
John Davenport
Executive VP & Director of Corporate Strategy0.3yrsno data0.066% $4.7m

7.8yrs

Average Tenure

58yo

Average Age

Experienced Management: PB's management team is seasoned and experienced (7.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
David Zalman
Senior Chairman & CEO19.1yrsUS$4.88m0.82% $57.8m
Kevin Hanigan
President0.3yrsno data0.17% $12.1m
H. Timanus
Chairman of the Board0.3yrsUS$2.32m0.44% $30.9m
Edward Safady
Vice Chairman0.3yrsUS$2.29m0.13% $8.8m
Robert Steelhammer
Independent Director37.1yrsUS$98.22k0.14% $10.0m
Harrison Stafford
Independent Director19.8yrsUS$100.42k0.32% $22.2m
William Luedke
Independent Director5.8yrsUS$97.17k0.016% $1.1m
Leah Henderson
Independent Director12.8yrsUS$98.22k0.018% $1.3m
Mark Humphrey
Chairman of Bryan0yrsno datano data
John Zacek
Chairman of South Texas Area - Prosperity Bank6.3yrsno datano data

5.8yrs

Average Tenure

64yo

Average Age

Experienced Board: PB's board of directors are considered experienced (5.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: PB 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 diluted in the past year, with total shares outstanding growing by 5.3%.


Top Shareholders

Company Information

Prosperity Bancshares, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Prosperity Bancshares, Inc.
  • Ticker: PB
  • Exchange: NYSE
  • Founded: 1983
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$7.011b
  • Shares outstanding: 94.75m
  • Website: https://www.prosperitybankusa.com

Number of Employees


Location

  • Prosperity Bancshares, Inc.
  • Prosperity Bank Plaza
  • 4295 San Felipe
  • Houston
  • Texas
  • 77027
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PBNYSE (New York Stock Exchange)YesCommon StockUSUSDNov 1998
PPYDB (Deutsche Boerse AG)YesCommon StockDEEURNov 1998

Biography

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides retail and commercial banking services to small and medium-sized businesses, and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts. The company also offers 1-4 family residential mortgage, commercial mortgage and multifamily residential, commercial and industrial, agricultural real estate, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; and consumer durables and home equity loans. In addition, it provides Internet banking and other cash management, mobile banking, trust and wealth management, retail brokerage, mortgage banking, and automated telephone banking services, as well as debit and credit cards. As of December 31, 2018, the company operated 242 full service banking locations comprising 65 in the Houston area, including The Woodlands; 29 in the South Texas area consisting of Corpus Christi and Victoria; 33 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area comprising Austin and San Antonio; 34 in the West Texas area, including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area. Prosperity Bancshares, Inc. was founded in 1983 and is based 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 00:00
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.