Contrasting Harleysville Financial (OTCMKTS:HARL) and Pinnacle Financial Partners (NASDAQ:PNFP)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Harleysville Financial	22.05%	10.44%	1.04%
Pinnacle Financial Partners	13.97%	8.89%	1.07%

Analyst Ratings

This is a summary of recent recommendations for Harleysville Financial and Pinnacle Financial Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Harleysville Financial	0	0	0	0	N/A
Pinnacle Financial Partners	0	5	5	0	2.50

Pinnacle Financial Partners has a consensus target price of $106.60, indicating a potential upside of 0.24%. Given Pinnacle Financial Partners’ higher possible upside, analysts clearly believe Pinnacle Financial Partners is more favorable than Harleysville Financial.

Volatility and Risk

Harleysville Financial has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, Pinnacle Financial Partners has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500.

Dividends

Harleysville Financial pays an annual dividend of $1.24 per share and has a dividend yield of 5.7%. Pinnacle Financial Partners pays an annual dividend of $0.88 per share and has a dividend yield of 0.8%. Harleysville Financial pays out 51.0% of its earnings in the form of a dividend. Pinnacle Financial Partners pays out 16.7% 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.

Insider and Institutional Ownership

1.2% of Harleysville Financial shares are owned by institutional investors. Comparatively, 87.4% of Pinnacle Financial Partners shares are owned by institutional investors. 14.5% of Harleysville Financial shares are owned by company insiders. Comparatively, 1.9% of Pinnacle Financial Partners shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Harleysville Financial	$40.39 million	1.96	$8.86 million	$2.43	8.97
Pinnacle Financial Partners	$1.52 billion	5.39	$562.15 million	$5.26	20.22

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

Summary

Pinnacle Financial Partners beats Harleysville Financial on 11 of the 15 factors compared between the two stocks.

About Harleysville Financial

Harleysville Financial Corporation operates as the bank holding company for Harleysville Bank that provides various banking products and services in Pennsylvania. The company offers various deposit products, including savings, money market, and checking accounts, as well as certificates of deposits. It also provides consumer loans, including residential mortgages, savings account loans, and home equity line of credit, construction, and non-real estate consumer loans; and commercial loans, such as commercial mortgages, line of credit, and commercial business loans. In addition, the company offers online banking and bill payment, mobile and telephone banking, remote deposit, debit cards, automated clearing house processing, sweep accounts, zero balance accounts, employee services, and other cash management services. Further, it provides investment services, such as financial consultation, cash and wealth management, education planning, investment strategy, insurance, retirement and estate planning, financial and goal planning, and asset allocation services, as well as offers investment products, such as fixed and variable annuities, mutual funds, life insurances, stocks and bonds, tax-advantaged investments, long-term care insurances, disability insurances, retirement plans/individual retirement accounts, wrap accounts, and unit investment trusts. Its primary market area includes Montgomery County and Bucks County. The company was formerly known as Harleysville Savings Financial Corporation and changed its name to Harleysville Financial Corporation in May 2017. Harleysville Financial Corporation was founded in 1915 and is headquartered in Harleysville, Pennsylvania.

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.