Peapack Gladstone Financial Corp (NASDAQ: PGC)

Sector: Financial Services Industry: Banks - Regional CIK: 0001050743
Market Cap 495.92 Mn
P/B 0.77
P/E 14.41
P/S 1.99
ROIC (Qtr) 4.33
Div Yield % 0.88
Rev 1y % (Qtr) 18.97
Total Debt (Qtr) 141.35 Mn
Debt/Equity (Qtr) 0.22

About

Peapack-Gladstone Financial Corporation (PGC), a bank holding company established in 1997 and headquartered in New Jersey, operates primarily through its subsidiary, Peapack-Gladstone Bank. This state-chartered commercial bank has been in operation since 1921 and offers a range of financial products and services. PGC's operations are concentrated in the commercial banking, private banking, and wealth management sectors, with a primary focus on serving high net-worth individuals, families, and businesses in New Jersey and New York. PGC's commercial...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 70.71M provides robust 0.50x coverage of total debt 141.35M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 7.40B provides 52.32x coverage of total debt 141.35M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 70.71M provides strong 12.84x coverage of stock compensation 5.51M, indicating sustainable incentive practices.
  • Robust free cash flow of 55.21M exceeds capital expenditure of 15.50M by 3.56x, indicating strong organic growth funding capability.
  • Retained earnings of 446.07M represent substantial 0.69x of equity 642.55M, indicating strong internal capital generation.

Bear case

  • Operating cash flow of 70.71M barely covers its investment activities of (798.82M), with a coverage ratio of -0.09, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 70.71M provides thin coverage of dividend payments of (3.52M) with a -20.10 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 55.21M represents just -1.58x of debt issuance (35M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 446.07M provide limited buffer against comprehensive income items of (50.48M), which is -8.84x, indicating elevated exposure to market risks.
  • Operating cash flow of 70.71M is outpaced by equity issuance of (8.71M) (-8.12 ratio), indicating concerning reliance on equity markets for funding operations.

Peer comparison

Companies in the Banks - Regional
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 USB Us Bancorp \De\ 84.44 Bn 12.40 3.25 77.98 Bn
2 PNC Pnc Financial Services Group, Inc. 84.36 Bn 13.61 3.73 62.34 Bn
3 NU Nu Holdings Ltd. 81.47 Bn 32.21 5.79 4.49 Bn
4 NWG NatWest Group plc 66.53 Bn 9.88 3.05 169.04 Bn
5 TFC Truist Financial Corp 64.60 Bn 13.18 3.53 71.11 Bn
6 MTB M&T Bank Corp 32.73 Bn 12.47 3.60 14.99 Bn
7 FITB Fifth Third Bancorp 31.96 Bn 14.15 3.93 18.94 Bn
8 FCNCA First Citizens Bancshares Inc /De/ 28.98 Bn 12.78 3.26 40.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.04 0.14
EV to Cash from Ops. EV/CFO 4.56 7.21
EV to Debt EV to Debt 2.28 5.20
EV to EBIT EV/EBIT 6.78 14.98
EV to EBITDA EV/EBITDA 6.14 8.92
EV to Free Cash Flow [EV/FCF] EV/FCF 5.84 8.87
EV to Market Cap EV to Market Cap 0.65 1.04
EV to Revenue EV/Rev 1.29 -3.76
Price to Book Value [P/B] P/B 0.77 1.17
Price to Earnings [P/E] P/E 14.41 15.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 9.78 271.44
Dividend Payout Ratio % Div Payout % (Qtr) 10.20 35.28
Dividend per Basic Share Div per Share (Qtr) 0.20 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 6.37 34.52
Interest Coverage Interest Coverage 0.00 -0.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -216.19 -73.15
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -29.53 15.78
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 5.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 6.37 110.93
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 6.91 38.80
EBIT Growth (1y) % EBIT 1y % (Qtr) 7.26 61.46
EBT Growth (1y) % EBT 1y % (Qtr) 7.26 61.37
EPS Growth (1y) % EPS 1y % (Qtr) 7.10 76.34
FCF Growth (1y) % FCF 1y % (Qtr) 34.47 161.72
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 18.72 14.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.04 0.26
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.22 0.53
Interest Cover Ratio Interest Cover Ratio 0.00 -0.05
Times Interest Earned Times Interest Earned 0.00 -0.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 21.10 147.97
EBIT Margin % EBIT Margin % (Qtr) 19.09 155.41
EBT Margin % EBT Margin % (Qtr) 19.09 154.66
Gross Margin % Gross Margin % (Qtr) 100.00 97.82
Net Profit Margin % Net Margin % (Qtr) 13.80 115.63