Head-To-Head Review: Stock Yards Bancorp (SYBT) versus Southside Bancshares (SBSI)

Stock Yards Bancorp (NASDAQ:SYBT) and Southside Bancshares (NASDAQ:SBSI) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Institutional and Insider Ownership

47.6% of Stock Yards Bancorp shares are held by institutional investors. Comparatively, 47.1% of Southside Bancshares shares are held by institutional investors. 8.4% of Stock Yards Bancorp shares are held by company insiders. Comparatively, 6.1% of Southside Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Stock Yards Bancorp has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.

Profitability

This table compares Stock Yards Bancorp and Southside Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stock Yards Bancorp 26.61% 14.66% 1.52%
Southside Bancshares 24.55% 9.07% 1.04%

Dividends

Stock Yards Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Southside Bancshares pays an annual dividend of $1.20 per share and has a dividend yield of 3.4%. Stock Yards Bancorp pays out 52.4% of its earnings in the form of a dividend. Southside Bancshares pays out 63.5% 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. Stock Yards Bancorp has increased its dividend for 6 consecutive years and Southside Bancshares has increased its dividend for 20 consecutive years. Southside Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Stock Yards Bancorp and Southside Bancshares’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stock Yards Bancorp $155.97 million 5.23 $38.04 million $1.91 18.78
Southside Bancshares $224.95 million 5.44 $54.31 million $1.89 18.45

Southside Bancshares has higher revenue and earnings than Stock Yards Bancorp. Southside Bancshares is trading at a lower price-to-earnings ratio than Stock Yards Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Stock Yards Bancorp and Southside Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stock Yards Bancorp 0 1 1 0 2.50
Southside Bancshares 0 1 0 0 2.00

Stock Yards Bancorp currently has a consensus price target of $40.00, indicating a potential upside of 11.51%. Southside Bancshares has a consensus price target of $37.00, indicating a potential upside of 6.11%. Given Stock Yards Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Stock Yards Bancorp is more favorable than Southside Bancshares.

Summary

Stock Yards Bancorp beats Southside Bancshares on 11 of the 17 factors compared between the two stocks.

Stock Yards Bancorp Company Profile

Stock Yards Bancorp, Inc. operates as the holding company for Stock Yards Bank & Trust Company that provides commercial and personal banking services in Louisville, Indianapolis, and Cincinnati. Its deposit products include demand deposits, savings deposits, certificates of deposit, money market deposits, and time deposits. The company's loan portfolio comprises commercial and industrial, construction and development, undeveloped land, real estate mortgage, and consumer loans; and originates and sells single-family residential mortgages. In addition, it offers securities brokerage services through an arrangement with a third party broker-dealer; and investment management, trust, employee benefit plan, estate administration, and financial planning services. As of December 31, 2017, the company had 37 banking locations, including 28 full service banking locations in the Louisville metropolitan statistical area (MSA), 4 full service banking locations in the Indianapolis MSA, and 5 full service banking locations in the Cincinnati MSA. Stock Yards Bancorp, Inc. was founded in 1904 and is headquartered in Louisville, Kentucky.

Southside Bancshares Company Profile

Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposit. The company's loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other installment loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers trust services consisting of investment management, administration, and advisory services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. The company operates through 60 branches and 40 motor bank facilities located in Tyler, Longview, Lindale, Gresham, Jacksonville, Bullard, Chandler, Hawkins, Palestine, Gun Barrel City, Whitehouse, Fort Worth, Arlington, Cleburne, Euless, Flower Mound, Frisco, Granbury, Grapevine, Irving, Watauga, Weatherford, Austin, Diboll, Lufkin, Nacogdoches, Cleveland, Splendora, Jasper, Pineland, Hemphill, and San Augustine; and a network of approximately 84 automated teller machines, as well as trust services, and/or loan production or other financial services offices. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.

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