Hilltop Holdings Inc. (HTH) stock analysis

P/E below its 5-year median

Hilltop's P/E of 15.2 is below its own 5-year median of 15.5.

P/E above the industry

Hilltop's P/E of 15.2 is above the Commercial Banks median of 12.1.

P/S below the industry

Hilltop's price-to-sales of 1.65 is below the Commercial Banks median of 3.60.

P/B below the industry

Hilltop's price-to-book of 0.99 is below the Commercial Banks median of 1.29.

Trading below fair value

The share price of $36.48 is below our fair value estimate of $37.31.

Margin of safety under 20%

The price is 2.2% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -0.2% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 18.2% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -11.7% over the last twelve months, against a 5-year average of -18.0% a year.

Growing slower than the industry

Revenue grew 0.2% over the last twelve months; the Commercial Banks median is 11.3%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 6.6% over the last twelve months and averaged 7.7% over five years; we look for 15% on both.

Return on assets under 1%

Return on assets was 0.9%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

Hilltop's return on equity of 6.6% is below the Commercial Banks median of 11.5%.

Earnings shrank over 5 years

Net income shrank 18.0% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 11.2% over the last twelve months, against a 5-year average of 12.2%.

Net margin below the industry

Hilltop's net margin of 11.2% is below the Commercial Banks median of 30.3%.

Well capitalized

Equity is 13.0% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Needs loans and deposits.

Adequate loan-loss reserve

The allowance for credit losses is not reported.

High cost base

Non-interest expense takes 83.5% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 3.4% over the past year.

Modest borrowings

Borrowings other than deposits are 39.3% of equity.

Pays a dividend

Hilltop paid dividends worth 1.7% of the share price over the last twelve months.

Yield below Treasuries

The 1.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Hilltop yields 1.7%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 33.4% of net income.

Covered by free cash flow

Dividends take 42.8% of free cash flow.