Key Takeaways
💸 Hilltop offers a 2.4% dividend yield with a steady five-year growth trend and a sustainable 35% payout ratio, supported by a history of consistent quarterly distributions.
💼 The company generated $208.9 million in operating cash flow over the trailing 12 months, with strong free cash flow and a substantial cash reserve of $1.79 billion.
📊 Analysts hold a consensus “Hold” rating with a $33.33 price target, noting recent upgrades tied to strength in fee-based business lines and prudent financial management.
Last Updated 5/11/25
Hilltop Holdings Inc. (HTH), based in Dallas, operates a diversified mix of businesses spanning regional banking, mortgage lending, and capital markets. Through its key subsidiaries—PlainsCapital Bank, PrimeLending, and HilltopSecurities—the company serves a broad range of clients while maintaining a firm commitment to balance sheet strength and risk management. Its leadership team, led by Jeremy Ford, has guided the company through multiple market cycles with a steady hand and a focus on shareholder value.
With a 2.4% dividend yield, a conservative 35% payout ratio, and solid cash flow generation, Hilltop offers a reliable income stream supported by consistent financial execution. Trading below book value with a healthy capital base and low debt, it presents a value-oriented option for investors seeking stable returns.
Recent Events
In the most recent quarter, Hilltop posted net income of just under $128 million, with earnings jumping more than 50% year-over-year. That’s not something to brush aside, especially considering the company’s trailing P/E ratio of 15.36—right in that comfortable zone where value and performance intersect.
Revenue also moved in the right direction, up 7.3% year-over-year, pointing to strength across its diversified financial services platform. Return on assets came in at 0.86% and return on equity at 6.3%, which aren’t groundbreaking but do reflect steady management and efficient capital use without taking excessive risks.
The real standout on the balance sheet? Cash. Hilltop is holding over $2.5 billion in cash—roughly $39 per share. With the stock currently trading around $30, that’s a rare cushion that provides flexibility and reinforces the company’s ability to support its dividend, no matter what the market throws at it.
Valuation-wise, the stock’s price/book ratio sits at 0.88, which suggests it’s trading below the value of its assets. It’s not unusual for regional financials to get this kind of discount, but it also raises an eyebrow—especially when earnings are growing and the dividend is comfortably covered.
Key Dividend Metrics
📈 Forward Yield: 2.40%
📉 Trailing Yield: 2.27%
🧮 5-Year Average Yield: 1.83%
💰 Payout Ratio: 35.03%
📆 Next Dividend Date: May 22, 2025
✂️ Last Dividend Increase: Steady growth trend
📦 Dividend Consistency: Maintained without cuts for a decade
Dividend Overview
Hilltop pays a forward annual dividend of $0.72 per share. That lands the yield at 2.40%, which may not turn heads in a screen for high yielders, but that’s not really the point here. What matters more is the structure behind the payout. The 35% payout ratio tells us it’s not stretching. In fact, it has plenty of breathing room to manage the dividend and still reinvest in operations or return more cash in the future.
Compared to its 5-year average yield of 1.83%, the current yield looks a bit sweeter. That can mean two things. One, the stock price has drifted a bit lower and made the yield more attractive. Two, the company has become more generous with its payouts. Either way, it’s good news for investors who value dependable income streams with upside.
The trading range over the past year—between $26.67 and $35.32—has been relatively tight. Right now, the stock hovers around $30, which is about where its 50-day moving average is sitting. It’s not bouncing around wildly, which fits the mold of what many income-focused investors are looking for: a stable, predictable investment that doesn’t feel like a rollercoaster.
Insiders own nearly 30% of shares and institutions hold another 58%. That level of ownership shows strong alignment with long-term shareholders. People on the inside clearly have a vested interest in seeing Hilltop continue to deliver returns, including through dividends.
Dividend Growth and Safety
Hilltop’s dividend story doesn’t follow a flashy script, but it’s a reliable one. Over the last several years, the dividend has moved up consistently—no sharp hikes, just steady increases that track along with earnings growth. That kind of pace may not get headlines, but it’s what many of us prefer: slow, reliable growth that doesn’t require a leap of faith.
The numbers back it up. Hilltop generated nearly $209 million in operating cash flow over the past 12 months, while only paying out a fraction of that in dividends. It’s using its cash wisely—paying shareholders, sure, but also holding plenty in reserve and staying out of debt trouble.
Speaking of which, the company holds about $2.4 billion in debt, balanced almost dollar-for-dollar with its cash. That nearly net-neutral debt position gives Hilltop serious stability, especially when rates are volatile and credit costs are creeping up for others.
And one more stat to keep in mind: Hilltop has a beta of 0.87. That’s not just a number—it means this stock tends to be less volatile than the broader market. If you’re building a dividend-focused portfolio with an eye on capital preservation, that kind of lower volatility can be a real asset.
At the end of the day, Hilltop’s dividend isn’t about being the biggest or boldest. It’s about being consistent, manageable, and well-supported. With a conservative payout ratio, a growing earnings base, and strong liquidity, the dividend looks well protected—and likely to keep inching upward, year by year.
Cash Flow Statement
Hilltop Holdings generated $208.9 million in operating cash flow over the trailing 12 months, down from $273.9 million the year before. This marks the second straight year of declining operating cash generation, though the company remains solidly cash flow positive. Despite the dip, free cash flow still came in at $203.4 million, suggesting that capital expenditures remain low and cash efficiency is strong. For a regional financial holding company, maintaining a positive and steady free cash flow level is key to supporting dividend payments, share buybacks, and balance sheet strength without relying on outside capital.
On the investing side, Hilltop reported positive cash flow of $311.8 million, reversing years of heavy outflows in 2021 and 2022. This signals a more cautious approach to capital allocation or divestments of previously held investments. Financing cash flow was negative at $510.5 million, reflecting a mix of debt repayments and continued share repurchases. The firm paid down over $1.28 billion in debt while issuing $1.18 billion, effectively managing its liabilities while preserving liquidity. Ending cash stood at $1.79 billion, still a significant reserve despite being below peak levels from previous years.
Analyst Ratings
📈 In early April, Raymond James revised its stance on Hilltop Holdings, upgrading the stock from underperform to market perform. This change in view was largely driven by the shifting interest rate environment and increased activity in bond markets—conditions that tend to benefit Hilltop’s fee-based operations, especially in mortgage lending and securities. With exposure to multiple financial service lines, the company stands to gain in these kinds of market conditions.
📉 On the flip side, Keefe, Bruyette & Woods took a more cautious tone later in April. They trimmed their price target from $34 to $32 but left their market perform rating unchanged. The lowered target suggests some hesitancy about short-term upside, possibly due to uncertainties in broader credit markets or tighter profit margins in some of Hilltop’s core lending areas.
🎯 As of now, the general sentiment from analysts is a hold rating. The average 12-month price target is sitting at $33.33, which points to a small upside from current levels. While not signaling a breakout, the target does reflect confidence in the stock’s ability to maintain its footing and deliver stable performance in the near term.
Earning Report Summary
Hilltop Holdings kicked off 2025 with a solid performance, showing real signs of strength and progress across its core businesses. Net income for the first quarter landed at $42 million, or $0.65 per diluted share. That’s a notable jump—more than 50% higher than the same time last year. It’s the kind of improvement that stands out, especially in a sector where consistent growth isn’t always a given.
Revenue Strength and Business Mix
Total revenue climbed to $318.5 million, marking an 11.6% increase compared to Q1 of the previous year. What really helped drive this number wasn’t just interest income but a strong boost from non-interest sources like investment advisory and securities business. Net interest income edged up slightly to $105.1 million, while the net interest margin held steady at 2.86%, showing resilience despite shifting rate dynamics.
Fee-based income was a highlight this quarter, rising nearly 18% to $213.3 million. That segment continues to be a reliable growth engine for Hilltop, giving it a buffer against pressure in more traditional banking areas.
Cost Management and Capital Position
Expenses were kept in check, with non-interest costs totaling $251.5 million. It’s clear management is keeping a close eye on spending while still supporting growth in key areas. At the same time, the company has been steadily building up its capital base. The common equity tier 1 capital ratio rose to 21.29%, compared to 19.73% a year ago. That kind of improvement gives Hilltop a stronger cushion and more flexibility going forward.
Leadership Outlook
Management struck a confident tone in their commentary. They pointed to the strength in their fee-driven businesses as a key contributor this quarter and reiterated their focus on managing risk carefully while still looking for smart ways to grow. There’s an ongoing emphasis on staying well-capitalized, making thoughtful investment decisions, and balancing short-term performance with long-term goals.
Hilltop’s leadership made it clear they’re not chasing quick wins. Instead, they’re sticking to a strategy that’s about steady execution, adapting to market shifts, and leaning into their diversified model to keep things balanced. It’s a measured approach, and so far this year, it’s paying off.
Management Team
Hilltop Holdings is led by an experienced executive team with deep roots in the financial services industry. At the center is Jeremy Ford, who has served as President and CEO since 2010 and was recently named Chairman in April 2025. Under his leadership, the company has taken a disciplined approach to growth, consistently emphasizing financial strength and shareholder returns. Ford maintains a meaningful ownership stake in the company, which aligns his decision-making closely with long-term investors.
Supporting him is William Furr, the Chief Financial Officer since 2016. Furr brings years of expertise in financial oversight and has played a critical role in preserving the firm’s strong capital ratios. Other key players include Darren Parmenter, Chief Administrative Officer, and Corey Prestidge, Executive Vice President, both of whom have been instrumental in steering Hilltop’s strategic initiatives. Leadership across the subsidiaries also brings decades of experience, particularly Brad Winges at HilltopSecurities and Steve Thompson at PrimeLending. Together, the team demonstrates a steady hand with a forward-looking mindset.
Valuation and Stock Performance
As of May 2025, Hilltop Holdings is trading at approximately $30.26 per share, putting its market capitalization close to $1.9 billion. Over the last twelve months, the stock has moved within a range of $26.67 to $35.32, with recent activity leaning toward the middle of that band. The stock has shown relative resilience, holding its ground even as broader financial markets have seen some choppiness.
The current price-to-earnings ratio is about 15.2, slightly below sector averages. Meanwhile, the price-to-book ratio of 0.9 suggests the stock is trading at a discount to its net asset value. For value-oriented investors, this could represent an opportunity to acquire a well-capitalized business at an attractive entry point. Analyst consensus has set a 12-month price target of $33.33, indicating a moderate expected upside.
From a dividend perspective, Hilltop offers a yield of 2.4 percent, supported by a prudent 35 percent payout ratio. The company has maintained a steady dividend track record over the years, reflecting a commitment to returning capital without compromising financial flexibility. With a beta of 0.87, the stock tends to show less volatility than the broader market, which may appeal to investors looking for lower-risk income-producing positions.
Risks and Considerations
Hilltop’s business, while diverse, is not without its pressures. PrimeLending, the mortgage division, is subject to fluctuations in interest rates and home-buying activity. When rates climb or housing demand softens, origination volumes can take a hit, affecting earnings in that segment.
HilltopSecurities, the investment banking and advisory arm, is another area that can be sensitive to broader financial market movements. Volatility can drive both higher transaction volumes and increased uncertainty, making revenue a bit unpredictable at times. Another point of concern is the company’s exposure to the auto lending sector. Management has acknowledged a rise in non-performing loans, particularly from its auto note program, and is working to contain risks through more conservative underwriting.
Macroeconomic headwinds, including potential recessions or shifts in regulatory frameworks, also warrant monitoring. While Hilltop has diversified operations that can help balance performance, no financial institution is entirely insulated from downturns or policy changes.
Final Thoughts
Hilltop Holdings offers a quiet strength that doesn’t rely on flash to deliver value. Its leadership team brings long-term focus and consistency to the table, guiding the company through both high and low cycles. Financially, it is well-positioned, with ample capital, steady earnings, and a clear commitment to sustainable dividends.
The stock’s current valuation presents a potentially compelling entry point for investors looking for steady income with some room for appreciation. While the company faces challenges in segments like mortgage lending and auto loans, its diversified business mix and conservative approach to risk help create a buffer against volatility. For investors with a patient, long-term outlook, Hilltop stands as a quietly solid choice in the financial space.