Old Point Financial (NASDAQ:OPOF) vs. Cullen/Frost Bankers (NYSE:CFR) Critical Survey

Old Point Financial (NASDAQ:OPOF) and Cullen/Frost Bankers (NYSE:CFR) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership and dividends.

Dividends

Old Point Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.0%. Cullen/Frost Bankers pays an annual dividend of $3.80 per share and has a dividend yield of 3.4%. Old Point Financial pays out 44.4% of its earnings in the form of a dividend. Cullen/Frost Bankers pays out 44.9% 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. Old Point Financial has increased its dividend for 3 consecutive years and Cullen/Frost Bankers has increased its dividend for 31 consecutive years. Cullen/Frost Bankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Old Point Financial and Cullen/Frost Bankers’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Old Point Financial	$60.59 million	1.58	$7.73 million	$1.26	14.93
Cullen/Frost Bankers	$2.00 billion	3.60	$597.97 million	$8.46	13.28

Cullen/Frost Bankers has higher revenue and earnings than Old Point Financial. Cullen/Frost Bankers is trading at a lower price-to-earnings ratio than Old Point Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Old Point Financial and Cullen/Frost Bankers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Old Point Financial	8.41%	6.69%	0.49%
Cullen/Frost Bankers	19.51%	17.43%	1.18%

Risk & Volatility

Old Point Financial has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500. Comparatively, Cullen/Frost Bankers has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Old Point Financial and Cullen/Frost Bankers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Old Point Financial	0	0	0	0	N/A
Cullen/Frost Bankers	3	8	3	0	2.00

Cullen/Frost Bankers has a consensus target price of $119.93, indicating a potential upside of 6.75%. Given Cullen/Frost Bankers’ higher probable upside, analysts clearly believe Cullen/Frost Bankers is more favorable than Old Point Financial.

Institutional and Insider Ownership

33.4% of Old Point Financial shares are owned by institutional investors. Comparatively, 86.9% of Cullen/Frost Bankers shares are owned by institutional investors. 21.1% of Old Point Financial shares are owned by company insiders. Comparatively, 2.9% of Cullen/Frost Bankers shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Cullen/Frost Bankers beats Old Point Financial on 13 of the 16 factors compared between the two stocks.

About Old Point Financial

Old Point Financial Corporation operates as the bank holding company for The Old Point National Bank of Phoebus that provides consumer, mortgage, and business banking services for individual and commercial customers in Virginia. It offers deposit products, including interest-bearing transaction accounts, money market deposit accounts, savings accounts, time deposits, and demand deposits. The company also provides real estate construction, commercial, and mortgage loans, such as residential 1-4 family mortgages, second mortgages, and equity lines of credit; and other loans. In addition, it offers retirement planning, estate planning, financial planning, estate and trust administration, retirement plan administration, tax, and investment management services; and insurance products, wealth management, and cash management services. Old Point Financial Corporation was founded in 1922 and is headquartered in Hampton, Virginia.

About Cullen/Frost Bankers

Cullen/Frost Bankers, Inc. operates as the bank holding company for Frost Bank that provides commercial and consumer banking services in Texas. The company offers commercial banking services to corporations, including financing for industrial and commercial properties, interim construction related to industrial and commercial properties, equipment, inventories and accounts receivables, and acquisitions; and treasury management services, as well as originates commercial leasing services. It also provides consumer banking services, such as checking accounts, savings programs, automated-teller machines (ATMs), overdraft facilities, installment and real estate loans, first mortgage loans, home equity loans and lines of credit, drive-in and night deposit services, safe deposit facilities, and brokerage services. In addition, the company offers international banking services comprising deposits, loans, letters of credit, foreign collections, funds transmitting, and foreign exchange services; correspondent banking activities, including check clearing, transfer of funds, fixed income security services, and securities custody and clearance services. Further, it offers trust, investment, agency, and custodial services for individual and corporate clients; capital market services that include sales and trading, new issue underwriting, money market trading, advisory, and securities safekeeping and clearance; and support for international business activities, including foreign exchange, letters of credit, export-import financing, and other related activities. Additionally, the company offers insurance and securities brokerage services; holding of securities for investment purposes; and investment management services for mutual funds, institutions, and individuals. It serves energy, manufacturing, services, construction, retail, telecommunications, healthcare, military, and transportation industries. The company was founded in 1868 and is headquartered in San Antonio, Texas.