Pinnacle Financial Partners, Inc. (NYSE: PNFP)

Sector: Financial Services Industry: Banks - Regional CIK: 0002082866
Market Cap 3.30 Bn
P/B 4.45
P/E 54.49
P/S 14.96
ROIC (Qtr) 6.77
Div Yield % 0.68
Rev 1y % (Qtr) 16.44
Total Debt (Qtr) 2.53 Bn
Debt/Equity (Qtr) 0.37
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About

Investment thesis

Bull case

  • Strong operating cash flow of 1.14B provides robust 0.45x coverage of total debt 2.53B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 54.10B provides 21.39x coverage of total debt 2.53B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 1.14B provides strong 30.15x coverage of stock compensation 37.92M, indicating sustainable incentive practices.
  • Robust free cash flow of 1.06B exceeds capital expenditure of 86.70M by 12.19x, indicating strong organic growth funding capability.
  • Operating cash flow of 1.14B provides strong 6.04x coverage of operating expenses 189.43M, showing operational efficiency.

Bear case

  • Operating cash flow of 1.14B barely covers its investment activities of (5.12B), with a coverage ratio of -0.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.14B provides thin coverage of dividend payments of (73.86M) with a -15.48 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 1.06B represents just -4.21x of debt issuance (251.07M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of 3.58B provide limited buffer against comprehensive income items of (159.77M), which is -22.41x, indicating elevated exposure to market risks.
  • Operating cash flow of 1.14B is outpaced by equity issuance of (14.03M) (-81.47 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 PNC Pnc Financial Services Group, Inc. 99.49 Bn 13.81 5.85 62.34 Bn
2 USB Us Bancorp \De\ 87.84 Bn 19.01 4.52 77.98 Bn
3 NU Nu Holdings Ltd. 81.18 Bn 32.10 5.77 4.49 Bn
4 NWG NatWest Group plc 63.11 Bn 9.11 2.81 168.56 Bn
5 RF Regions Financial Corp 39.59 Bn 38.18 7.68 6.09 Bn
6 TFC Truist Financial Corp 39.02 Bn 20.15 4.25 71.11 Bn
7 FITB Fifth Third Bancorp 34.49 Bn -132.65 9.50 18.94 Bn
8 MTB M&T Bank Corp 33.34 Bn 20.67 5.83 14.99 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.06 0.13
EV to Assets EV to Assets 0.06 0.13
EV to Cash from Ops. EV/CFO 29.00 13.53
EV to Cash from Ops. EV/CFO 29.00 13.53
EV to Debt EV to Debt 1.33 7.69
EV to Debt EV to Debt 1.33 7.69
EV to EBIT EV/EBIT 37.14 24.25
EV to EBIT EV/EBIT 37.14 24.25
EV to EBITDA EV/EBITDA 33.75 12.10
EV to EBITDA EV/EBITDA 33.75 12.10
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 6.83 276.83
Dividend Coverage Ratio Div Coverage (Qtr) 6.83 276.83
Dividend Payout Ratio % Div Payout % (Qtr) 11.90 34.36
Dividend Payout Ratio % Div Payout % (Qtr) 11.90 34.36
Dividend per Basic Share Div per Share (Qtr) 0.72 0.89
Dividend per Basic Share Div per Share (Qtr) 0.72 0.89
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 5.24 24.01
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 5.24 24.01
Interest Coverage Interest Coverage 0.00 -0.06
Interest Coverage Interest Coverage 0.00 -0.06
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -8.92 -73.37
Capex Growth (1y) % Capex 1y % (Qtr) -8.92 -73.37
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 15.26 18.43
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 15.26 18.43
Dividend Growth (1y) % Div 1y % (Qtr) -18.18 5.56
Dividend Growth (1y) % Div 1y % (Qtr) -18.18 5.56
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 48.85 117.24
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 48.85 117.24
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 40.34 36.31
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 40.34 36.31
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.04
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.03 0.04
Cash Payout Ratio Cash Payout (Qtr) 0.06 0.25
Cash Payout Ratio Cash Payout (Qtr) 0.06 0.25
Cash Ratio Cash Ratio 0.00 0.00
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.01
Current Ratio Current Ratio 0.00 0.01
Debt to Equity Ratio Debt/Equity (Qtr) 0.37 0.52
Debt to Equity Ratio Debt/Equity (Qtr) 0.37 0.52
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 46.00 150.40
EBITDA Margin % EBITDA Margin % (Qtr) 46.00 150.40
EBIT Margin % EBIT Margin % (Qtr) 40.22 157.97
EBIT Margin % EBIT Margin % (Qtr) 40.22 157.97
EBT Margin % EBT Margin % (Qtr) 40.22 157.21
EBT Margin % EBT Margin % (Qtr) 40.22 157.21
Gross Margin % Gross Margin % (Qtr) 100.00 97.97
Gross Margin % Gross Margin % (Qtr) 100.00 97.97
Net Profit Margin % Net Margin % (Qtr) 32.30 117.48
Net Profit Margin % Net Margin % (Qtr) 32.30 117.48