Simmons First National (NASDAQ:SFNC) and CBTX (NASDAQ:CBTX) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.
Insider and Institutional Ownership
20.9% of Simmons First National shares are held by institutional investors. Comparatively, 28.8% of CBTX shares are held by institutional investors. 2.0% of Simmons First National shares are held by company insiders. Comparatively, 29.2% of CBTX shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
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||25.17%||9.76%||1.33%|
Valuation & Earnings
This table compares Simmons First National and CBTX’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Simmons First National||$824.58 million||2.60||$215.71 million||$2.37||9.44|
|CBTX||$137.51 million||5.20||$47.29 million||$1.89||14.54|
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.
Simmons First National pays an annual dividend of $0.64 per share and has a dividend yield of 2.9%. CBTX pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Simmons First National pays out 27.0% of its earnings in the form of a dividend. CBTX pays out 21.2% 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 raised its dividend for 7 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Simmons First National has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, CBTX has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.
This is a breakdown of recent ratings and recommmendations for Simmons First National and CBTX, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Simmons First National||0||2||2||0||2.50|
Simmons First National presently has a consensus target price of $30.00, indicating a potential upside of 34.05%. CBTX has a consensus target price of $35.00, indicating a potential upside of 27.32%. Given Simmons First National’s stronger consensus rating and higher possible upside, analysts clearly believe Simmons First National is more favorable than CBTX.
CBTX beats Simmons First National on 9 of the 17 factors compared between the two stocks.
Simmons First National Company Profile
Simmons First National Corporation operates as the holding company for Simmons Bank that provides financial products and services to individuals and businesses. It offers checking, savings, and time deposits; loan products, including consumer, real estate, commercial, agricultural, equipment, and SBA lending; personal and corporate trust services; credit cards; investment management products; insurance products; and securities and investment services. The company conducts banking operations through approximately 191 financial centers located in communities throughout Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee, and Texas. Simmons First National Corporation was founded in 1903 and is headquartered in Pine Bluff, Arkansas.
CBTX Company Profile
CBTX, Inc. operates as the bank holding company for CommunityBank of Texas, National Association that provides commercial banking solutions to small and mid-sized businesses, and professionals in the United States. The company offers various deposit products, including demand, savings, money market, and time accounts; and loans, such as commercial and industrial loans, commercial real estate loans, construction and development loans, 1-4 family residential mortgage loans, multi-family residential loans, consumer loans, and agricultural loans. It also provides treasury and online banking services. CBTX, Inc. operates 35 banking locations, including 19 branches in Houston; 15 branches in Beaumont; and 1 branch in Dallas. The company was formerly known as CBFH, Inc. and changed its name to CBTX, Inc. in September 2017. CBTX, Inc. was founded in 2007 and is based in Houston, Texas.
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