Hilltop Holdings Inc. (NYSE:HTH) Financial Analysis

• Hilltop Holdings Inc. (NYSE:HTH) has a Return on Invested Capital (ROIC) of -4.85% and a Weighted Average Cost of Capital (WACC) of 15.83%, indicating poor capital utilization.
• National Bank Holdings Corporation (NBHC) showcases efficient capital utilization with a ROIC of 16.89% and a WACC of 11.84%, resulting in a ROIC to WACC ratio of 1.43.
• Comparatively, other peers like Independent Bank Group, FB Financial, Home Bancshares, and Horace Mann Educators exhibit varying degrees of capital efficiency, with NBHC standing out as a strong performer.

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 financial advisory services. In the competitive landscape, Hilltop faces peers like Independent Bank Group, National Bank Holdings, FB Financial, Home Bancshares, and Horace Mann Educators.

Hilltop Holdings has a Return on Invested Capital (ROIC) of -4.85% and a Weighted Average Cost of Capital (WACC) of 15.83%. This results in a ROIC to WACC ratio of -0.31, indicating that the company is not generating sufficient returns to cover its cost of capital. This inefficiency in capital utilization is a concern for investors, as it suggests that the company is not using its resources effectively to generate profits.

In comparison, 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 its ROIC is positive, it still falls short of covering its cost of capital. Similarly, FB Financial Corporation (FBK) has a ROIC of 4.71% and a WACC of 15.53%, with a ROIC to WACC ratio of 0.30, indicating a similar challenge in capital efficiency.

National Bank Holdings Corporation (NBHC) stands out with a ROIC of 16.89% and a WACC of 11.84%, leading to a ROIC to WACC ratio of 1.43. This suggests that NBHC is effectively utilizing its capital to generate returns well above its cost, making it a strong performer among its peers. This efficient capital utilization highlights NBHC as a potentially attractive investment opportunity.

Home Bancshares, Inc. (HOMB) and Horace Mann Educators Corporation (HMN) also present interesting cases. HOMB has a negative ROIC of -0.49% against a WACC of 10.81%, resulting in a ROIC to WACC ratio of -0.05, indicating inefficiencies similar to Hilltop. In contrast, HMN has a ROIC of 3.99% and a WACC of 5.64%, with a ROIC to WACC ratio of 0.71, showing better capital utilization than some peers.