Bancorpsouth Bank (BXS) & QCR (QCRH) Critical Comparison

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Bancorpsouth Bank (NASDAQ: QCRH) and QCR (NASDAQ:QCRH) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for Bancorpsouth Bank and QCR, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bancorpsouth Bank 0 6 1 0 2.14
QCR 0 0 5 0 3.00

Bancorpsouth Bank currently has a consensus target price of $35.00, suggesting a potential upside of 1.30%. QCR has a consensus target price of $53.60, suggesting a potential upside of 20.18%. Given QCR’s stronger consensus rating and higher possible upside, analysts plainly believe QCR is more favorable than Bancorpsouth Bank.

Dividends

Bancorpsouth Bank pays an annual dividend of $0.56 per share and has a dividend yield of 1.6%. QCR pays an annual dividend of $0.24 per share and has a dividend yield of 0.5%. Bancorpsouth Bank pays out 33.5% of its earnings in the form of a dividend. QCR pays out 9.0% 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. Bancorpsouth Bank has raised its dividend for 5 consecutive years and QCR has raised its dividend for 2 consecutive years. Bancorpsouth Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Bancorpsouth Bank has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, QCR has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.

Insider and Institutional Ownership

70.3% of Bancorpsouth Bank shares are owned by institutional investors. Comparatively, 62.5% of QCR shares are owned by institutional investors. 2.6% of Bancorpsouth Bank shares are owned by company insiders. Comparatively, 8.8% of QCR shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Bancorpsouth Bank and QCR’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bancorpsouth Bank $781.02 million 4.00 $153.03 million $1.67 20.69
QCR $166.00 million 4.21 $35.70 million $2.66 16.77

Bancorpsouth Bank has higher revenue and earnings than QCR. QCR is trading at a lower price-to-earnings ratio than Bancorpsouth Bank, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bancorpsouth Bank and QCR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bancorpsouth Bank 21.59% 9.90% 1.16%
QCR 20.84% 11.54% 1.02%

Summary

Bancorpsouth Bank beats QCR on 9 of the 17 factors compared between the two stocks.

Bancorpsouth Bank Company Profile

BancorpSouth Bank provides commercial banking and financial services to individuals and small-to-medium size businesses. It offers various deposit products, including interest and noninterest bearing demand deposits, and saving and other time deposits. The company also provides commercial loans, including term loans, lines of credit, equipment and receivable financing, and agricultural loans; a range of short-to-medium term secured and unsecured commercial loans to businesses for working capital, business expansion, and the purchase of equipment and machinery; and construction loans to real estate developers for the acquisition, development, and construction of residential subdivisions. In addition, it offers fixed and adjustable rate residential mortgage loans secured by owner-occupied property; residential construction loans; second mortgage loans; and home equity lines of credit, as well as non-residential consumer loans that consist of automobile, recreation vehicle, boat, personal, and deposit account secured loans, as well as issues credit cards. Further, the company operates as an agent for the sale of commercial lines of insurance; and a line of property and casualty, life, health, and employee benefits products and services. Additionally, it provides investment brokerage, and personal trust and estate services. As of April 25, 2018, the company operated through 279 full service branch locations, as well mortgage, insurance, and loan production offices in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee, Texas, and Illinois. The company was formerly known as BancorpSouth, Inc. and changed its name to BancorpSouth Bank in October 2017. BancorpSouth Bank was founded in 1876 and is headquartered in Tupelo, Mississippi.

QCR Company Profile

QCR Holdings, Inc., a multi-bank holding company, provides commercial and consumer banking, and trust and asset management services. The company operates through Commercial Banking and Wealth Management segments. Its deposit products include noninterest and interest-bearing demand, time, and brokered time deposits. The company also provides various commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals, and government agencies. Its loan portfolio comprises loans to small and mid-sized businesses; business loans, including lines of credit for working capital and operational purposes; term loans for the acquisition of facilities, equipment, and other purposes; commercial and residential real estate loans; and installment and other consumer loans, such as home improvement, home equity, motor vehicle, and signature loans, as well as small personal credit lines. In addition, the company engages in leasing machinery and equipment to commercial and industrial businesses under direct financing lease contracts; and issuing various trust preferred securities. It serves the Quad Cities, Cedar Rapids, Waterloo/Cedar Falls, Des Moines/Ankeny, and Rockford communities. The company was founded in 1993 and is headquartered in Moline, Illinois.

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