Hilltop Holdings Inc. (NYSE:HTH) Financial Performance Analysis

Hilltop Holdings Inc. (NYSE:HTH) is a financial holding company that provides a range of banking and financial services. It operates through its subsidiaries, offering commercial and consumer banking, mortgage origination, and insurance services. In the competitive financial sector, Hilltop faces competition from other banking institutions like Independent Bank Group, National Bank Holdings Corporation, and others.

In analyzing Hilltop's financial performance, the focus is on its Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC). Hilltop's ROIC is -2.37%, while its WACC is 15.61%. This results in a ROIC to WACC ratio of -0.15, indicating that Hilltop is not generating enough returns to cover its cost of capital, which is a concern for investors.

Comparatively, Independent Bank Group (IBTX) has a ROIC of 5.23% and a WACC of 19.00%, resulting in a ROIC to WACC ratio of 0.28. Although IBTX's returns are below its cost of capital, it is still performing better than Hilltop. This suggests that IBTX is more efficient in utilizing its capital compared to Hilltop.

National Bank Holdings Corporation (NBHC) is the standout performer with a ROIC of 16.84% and a WACC of 16.79%, leading to a ROIC to WACC ratio of 1.00. This indicates that NBHC is effectively generating returns that slightly exceed its cost of capital, making it the most efficient among its peers in capital utilization.

Other peers like FB Financial Corporation (FBK) and Home Bancshares, Inc. (HOMB) also show varying levels of efficiency. FBK has a ROIC of 0.60% and a WACC of 19.69%, resulting in a low ROIC to WACC ratio of 0.03. HOMB, with a ROIC of -0.49% and a WACC of 9.06%, has a ROIC to WACC ratio of -0.05. These figures highlight the challenges these companies face in generating returns above their cost of capital, similar to Hilltop.