Comparing Yadkin Financial (YDKN) and Pacific Continental (NASDAQ:PCBK)

Pacific Continental (NASDAQ: PCBK) and Yadkin Financial (NYSE:YDKN) are both small-cap financials companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Dividends

Pacific Continental pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. Yadkin Financial pays an annual dividend of $0.40 per share and has a dividend yield of 1.2%. Pacific Continental pays out 38.9% of its earnings in the form of a dividend. Yadkin Financial pays out 35.7% 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. Yadkin Financial has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Pacific Continental and Yadkin Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Continental 0 2 0 0 2.00
Yadkin Financial 0 0 0 0 N/A

Pacific Continental presently has a consensus target price of $28.00, suggesting a potential upside of 0.00%. Given Pacific Continental’s higher possible upside, analysts plainly believe Pacific Continental is more favorable than Yadkin Financial.

Profitability

This table compares Pacific Continental and Yadkin Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Continental 26.45% 10.15% 1.10%
Yadkin Financial 18.40% 5.41% 0.75%

Valuation & Earnings

This table compares Pacific Continental and Yadkin Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacific Continental $97.76 6,521,685.76 $19.77 $1.13 24.78
Yadkin Financial N/A N/A N/A $1.12 30.79

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

Institutional & Insider Ownership

67.5% of Pacific Continental shares are owned by institutional investors. Comparatively, 69.7% of Yadkin Financial shares are owned by institutional investors. 4.8% of Pacific Continental shares are owned by company insiders. Comparatively, 3.0% of Yadkin Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Pacific Continental has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500. Comparatively, Yadkin Financial has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Summary

Pacific Continental beats Yadkin Financial on 8 of the 13 factors compared between the two stocks.

Pacific Continental Company Profile

Pacific Continental Corporation is a bank holding company. The Company’s principal business activities are conducted through its subsidiary, Pacific Continental Bank (the Bank), an Oregon state-chartered bank with deposits insured by the Federal Deposit Insurance Corporation. The Bank operates in three primary markets: Eugene, Oregon, Portland; Oregon/Southwest Washington, and Seattle, Washington. As of December 31, 2016, the Bank operated 15 full-service offices in Oregon and Washington and two loan production offices in Washington and Colorado. The Bank primarily operates in large commercial markets and provides banking and related services designed for community-based businesses, nonprofit organizations, professional service providers and banking services for business owners. It provides traditional commercial and consumer banking services, including cash management products for businesses, online banking, safe deposit services debit and automated teller machine cards and others.

Yadkin Financial Company Profile

Yadkin Financial Corporation is a bank holding company. The Company conducts its business operations through its subsidiary, Yadkin Bank, which is a chartered community bank that provides services in approximately 110 branches across North Carolina and South Carolina. Yadkin Bank provides banking, mortgage, investment and insurance services to businesses and consumers across the Carolinas. It operates through a segment, which is providing general commercial banking and financial services to individuals and businesses located in North Carolina and South Carolina, and to customers in various states through its Small Business Administration (SBA) lending program. It offers various loans, such as commercial and industrial (C&I) loans and government-guaranteed loans. The Company’s investment securities portfolio includes the United States Government-sponsored enterprise (GSE) obligations and securities guaranteed by the United States SBA. The Company’s primary source of funds is deposits.

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