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

• Hilltop Holdings Inc. (NYSE:HTH) has a Return on Invested Capital (ROIC) of -3.74% and a Weighted Average Cost of Capital (WACC) of 14.97%, indicating it is not generating sufficient returns to cover its cost of capital.
• Comparatively, Home Bancshares (HOMB) showcases a ROIC of 270.87% against a WACC of 11.63%, demonstrating exceptional capital efficiency among its peers.
• National Bank Holdings (NBHC) and Independent Bank Group (IBTX) also face challenges in covering their WACC, though to varying degrees, with NBHC showing a more favorable scenario than Hilltop and IBTX.

Hilltop Holdings Inc. (NYSE:HTH) is a financial holding company that provides a range of banking and financial services. The company operates through its subsidiaries, offering services such as banking, mortgage origination, and financial advisory. In the competitive financial sector, Hilltop faces competition from other banks and financial institutions like Independent Bank Group, National Bank Holdings, and Home Bancshares.

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 14.97%. This negative ROIC indicates that Hilltop is not generating enough returns to cover its cost of capital, which is a concern for investors.

Comparing Hilltop to its peers, 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 ROIC is positive, it still falls short of covering its WACC, similar to Hilltop's situation.

National Bank Holdings (NBHC) shows a more favorable scenario with a ROIC of 13.57% and a WACC of 17.07%, leading to a ROIC to WACC ratio of 0.80. This indicates that NBHC is closer to covering its cost of capital compared to Hilltop and IBTX.

Home Bancshares (HOMB) stands out with a remarkable ROIC of 270.87% against a WACC of 11.63%, resulting in a ROIC to WACC ratio of 23.30. This demonstrates exceptional capital efficiency, making HOMB the most effective in utilizing its capital among the peers, highlighting a stark contrast to Hilltop's performance.