Simmons First National (NASDAQ:SFNC) and CBTX (NASDAQ:CBTX) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.
Valuation & Earnings
This table compares Simmons First National and CBTX's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Simmons First National | $988.15 million | 3.23 | $238.17 million | $2.73 | 10.78 |
CBTX | $172.02 million | 4.66 | $50.52 million | $2.02 | 16.13 |
Simmons First National has higher revenue and earnings than CBTX. Simmons First National is trading at a lower price-to-earnings ratio than CBTX, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
24.2% of Simmons First National shares are owned by institutional investors. Comparatively, 33.5% of CBTX shares are owned by institutional investors. 1.6% of Simmons First National shares are owned by company insiders. Comparatively, 30.1% of CBTX shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Profitability
This table compares Simmons First National and CBTX's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Simmons First National | 24.39% | 9.37% | 1.28% |
CBTX | 18.21% | 5.35% | 0.79% |
Dividends
Simmons First National pays an annual dividend of $0.72 per share and has a dividend yield of 2.4%. CBTX pays an annual dividend of $0.52 per share and has a dividend yield of 1.6%. Simmons First National pays out 26.4% of its earnings in the form of a dividend. CBTX pays out 25.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Simmons First National has increased its dividend for 7 consecutive years and CBTX has increased its dividend for 1 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Simmons First National has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, CBTX has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and target prices for Simmons First National and CBTX, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Simmons First National | 0 | 3 | 0 | 0 | 2.00 |
CBTX | 0 | 2 | 0 | 0 | 2.00 |
Simmons First National currently has a consensus target price of $22.3333, suggesting a potential downside of 24.11%. CBTX has a consensus target price of $28.00, suggesting a potential downside of 14.08%. Given CBTX's higher probable upside, analysts clearly believe CBTX is more favorable than Simmons First National.
Summary
Simmons First National beats CBTX on 8 of the 15 factors compared between the two stocks.