Texas Capital Bancshares (NASDAQ:TCBI – Get Free Report) and MetroCity Bankshares (NASDAQ:MCBS – Get Free Report) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.
Risk & Volatility
Texas Capital Bancshares has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, MetroCity Bankshares has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.
Valuation and Earnings
This table compares Texas Capital Bancshares and MetroCity Bankshares”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Texas Capital Bancshares | $2.00 billion | 1.97 | $330.24 million | $7.69 | 11.78 |
| MetroCity Bankshares | $246.01 million | 4.04 | $68.53 million | $2.88 | 12.00 |
Texas Capital Bancshares has higher revenue and earnings than MetroCity Bankshares. Texas Capital Bancshares is trading at a lower price-to-earnings ratio than MetroCity Bankshares, indicating that it is currently the more affordable of the two stocks.
Dividends
Texas Capital Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 0.9%. MetroCity Bankshares pays an annual dividend of $1.16 per share and has a dividend yield of 3.4%. Texas Capital Bancshares pays out 10.4% of its earnings in the form of a dividend. MetroCity Bankshares pays out 40.3% 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.
Institutional and Insider Ownership
96.9% of Texas Capital Bancshares shares are owned by institutional investors. Comparatively, 25.3% of MetroCity Bankshares shares are owned by institutional investors. 1.9% of Texas Capital Bancshares shares are owned by insiders. Comparatively, 20.2% of MetroCity Bankshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current recommendations for Texas Capital Bancshares and MetroCity Bankshares, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Texas Capital Bancshares | 1 | 8 | 4 | 0 | 2.23 |
| MetroCity Bankshares | 0 | 1 | 1 | 0 | 2.50 |
Texas Capital Bancshares presently has a consensus price target of $104.50, suggesting a potential upside of 15.37%. MetroCity Bankshares has a consensus price target of $33.00, suggesting a potential downside of 4.51%. Given Texas Capital Bancshares’ higher possible upside, analysts clearly believe Texas Capital Bancshares is more favorable than MetroCity Bankshares.
Profitability
This table compares Texas Capital Bancshares and MetroCity Bankshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Texas Capital Bancshares | 17.90% | 10.86% | 1.10% |
| MetroCity Bankshares | 28.40% | 15.16% | 1.82% |
Summary
MetroCity Bankshares beats Texas Capital Bancshares on 9 of the 16 factors compared between the two stocks.
About Texas Capital Bancshares
Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, is a full-service financial services firm that delivers customized solutions to businesses, entrepreneurs, and individual customers. The company offers commercial banking; consumer banking; investment banking solutions, including capital markets, mergers and acquisitions, and syndicated finance, as well as financial sponsor coverage, capital solutions, and institutional services; and wealth management services, such as investment management, financial planning, lockbox and insurance, securities-based lending, estate planning, and business succession, as well as philanthropic, trustee and executor, custom credit, and depository services. It also provides deposit accounts, analyzed accounts, commercial card, SBA and business loans, packaged solutions, and merchant services; liquidity and investments, working capital, international trade and payment, and treasury and credit products; and commercial real estate, homebuilder and community, and mortgage finance. In addition, the company offers payables and receivables management; online and mobile banking; term loans and lines of credit, equipment finance and lease, acquisition finance, and asset-based lending; private wealth advisory solutions; and checking and savings accounts, debit and credit cards, and certificates of deposit, as well as ETF and funds management services. Further, it provides financial institution money market accounts and loan syndication products; commercial loans for financing for working capital, organic growth, and acquisitions; real estate term and construction loans; mortgage warehouse lending services; treasury management, trust, and advisory and escrow services; and letters of credit. The company operates in Austin, Dallas, Fort Worth, Houston, and San Antonio metropolitan areas of Texas. Texas Capital Bancshares, Inc. was incorporated in 1996 and is headquartered in Dallas, Texas.
About MetroCity Bankshares
MetroCity Bankshares, Inc. operates as the bank holding company for Metro City Bank that engages in the provision of banking products and services in the United States. It offers customary banking services, such as consumer and commercial checking accounts, savings, and money market accounts, as well as certificates of deposit. The company also provides commercial and consumer loans, including single family residential loans; construction and development, and owner and non-owner occupied commercial real estate loans; letters of credit; and commercial and industrial loans, residential mortgage loans, and SBA loans. In addition, it offers online banking services, which include access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; mobile banking solutions, such as remote check deposit with mobile bill pay; and automated teller machines and telephone banking services. Further, it provides debit cards for checking customers, direct deposits, and cashier's checks; treasury management services, including wire transfer, automated clearing house, and stop payments services; and cash management deposit products, such as remote deposit capture, positive pay, zero balance accounts, and sweep accounts. The company was founded in 2006 and is headquartered in Atlanta, Georgia.
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