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 services such as banking, mortgage origination, and financial advisory. In the competitive financial sector, Hilltop faces competition from other financial institutions like Independent Bank Group, National Bank Holdings, FB Financial, Home Bancshares, and Horace Mann Educators.

In evaluating Hilltop's financial performance, the Return on Invested Capital (ROIC) and Weighted Average Cost of Capital (WACC) are crucial metrics. Hilltop's ROIC is -3.74%, while its WACC is 15.11%. This negative ROIC indicates that Hilltop is not generating enough returns to cover its cost of capital, which is a concern for investors.

Comparatively, Independent Bank Group has a ROIC of 5.23% and a WACC of 19.00%, resulting in a ROIC to WACC ratio of 0.28. Although its ROIC is positive, the high WACC suggests that the returns are not significantly exceeding the cost of capital. National Bank Holdings, with a ROIC of 13.57% and a WACC of 17.23%, achieves a better ratio of 0.79, indicating more efficient capital use. Home Bancshares excels with a ROIC of 270.87% and a WACC of 11.80%, achieving a remarkable ROIC to WACC ratio of 22.95, highlighting its superior capital efficiency.

Horace Mann Educators Corporation, with a ROIC of 0.80% and a WACC of 5.56%, has a ratio of 0.14. While it is generating returns above its cost of capital, the margin is relatively narrow. Overall, Hilltop Holdings' negative ROIC to WACC ratio of -0.25 underscores its current challenges in capital utilization compared to its peers.