Pinnacle Financial Partners (NASDAQ:PNFP) & Heartland BancCorp (OTCMKTS:HLAN) Critical Analysis

Heartland BancCorp (OTCMKTS:HLAN) and Pinnacle Financial Partners (NASDAQ:PNFP) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, dividends and risk.

Insider & Institutional Ownership

7.5% of Heartland BancCorp shares are held by institutional investors. Comparatively, 87.4% of Pinnacle Financial Partners shares are held by institutional investors. 22.7% of Heartland BancCorp shares are held by company insiders. Comparatively, 1.9% of Pinnacle Financial Partners shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Heartland BancCorp and Pinnacle Financial Partners”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Heartland BancCorp	$104.83 million	2.77	$19.52 million	$9.94	14.49
Pinnacle Financial Partners	$1.37 billion	5.45	$562.15 million	$6.99	13.80

Pinnacle Financial Partners has higher revenue and earnings than Heartland BancCorp. Pinnacle Financial Partners is trading at a lower price-to-earnings ratio than Heartland BancCorp, indicating that it is currently the more affordable of the two stocks.

Dividends

Heartland BancCorp pays an annual dividend of $3.03 per share and has a dividend yield of 2.1%. Pinnacle Financial Partners pays an annual dividend of $0.88 per share and has a dividend yield of 0.9%. Heartland BancCorp pays out 30.5% of its earnings in the form of a dividend. Pinnacle Financial Partners pays out 12.6% 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Heartland BancCorp and Pinnacle Financial Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Heartland BancCorp	0	1	1	0	2.50
Pinnacle Financial Partners	0	4	6	0	2.60

Heartland BancCorp currently has a consensus price target of $122.50, indicating a potential downside of 14.93%. Pinnacle Financial Partners has a consensus price target of $100.20, indicating a potential upside of 3.87%. Given Pinnacle Financial Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Pinnacle Financial Partners is more favorable than Heartland BancCorp.

Profitability

This table compares Heartland BancCorp and Pinnacle Financial Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Heartland BancCorp	17.89%	N/A	N/A
Pinnacle Financial Partners	13.93%	8.97%	1.08%

Risk and Volatility

Heartland BancCorp has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, Pinnacle Financial Partners has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Summary

Pinnacle Financial Partners beats Heartland BancCorp on 11 of the 16 factors compared between the two stocks.

About Heartland BancCorp

Heartland BancCorp operates as the bank holding company for Heartland Bank that provides various banking and financial services to individual and corporate customers. The company offers personal and business checking and savings accounts. It also provides various lending solutions comprising agricultural loans, commercial and business lending, home and personal loans, and title services. In addition, the company offers online banking, treasury management, credit and debit card, and mobile wallet services. Further, it provides education planning, insurance, wealth management, and retirement planning services. Heartland BancCorp was founded in 1911 and is based in Whitehall, Ohio.

About Pinnacle Financial Partners

Pinnacle Financial Partners, Inc., together with its subsidiaries, operates as the bank holding company for Pinnacle Bank that provides various banking products and services to individuals, businesses, and professional entities in the United States. The company accepts various deposits, including savings, noninterest-bearing and interest-bearing checking, money market, and certificate of deposit accounts; and provides treasury management services, which includes online wire origination, enhanced ACH origination services, positive pay, zero balance and sweep accounts, automated bill pay services, electronic receivables processing, lockbox processing, and merchant card acceptance services. It offers equipment and working capital loans; commercial real estate loans comprising investment properties and business loans; secured and unsecured loans, such as installment and term, lines of credit, and residential first mortgage, as well as home equity loans and home equity lines of credit; and credit cards for consumers and businesses. The company also provides investment products; brokerage and investment advisory programs; and fiduciary and investment services, such as personal trust, investment management, estate administration, endowments, foundations, individual retirement accounts, escrow services, and custody. In addition, it offers insurance agency services primarily in the property and casualty area; merger and acquisition advisory services; and private debt, equity and mezzanine, and other middle-market advisory services. Further, the company provides telephone and online banking, mobile banking, debit and credit cards, direct deposit and remote deposit capture, mobile deposit option, automated teller machine, and cash management services. Pinnacle Financial Partners, Inc. was incorporated in 2000 and is headquartered in Nashville, Tennessee.