CapStar Financial (NASDAQ:CSTR – Get Free Report) and Surrey Bancorp (OTCMKTS:SRYB – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.
Risk and Volatility
CapStar Financial has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, Surrey Bancorp has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.
Profitability
This table compares CapStar Financial and Surrey Bancorp’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
CapStar Financial | 16.17% | 8.46% | 0.93% |
Surrey Bancorp | 37.97% | N/A | N/A |
Institutional & Insider Ownership
Dividends
CapStar Financial pays an annual dividend of $0.44 per share and has a dividend yield of 2.2%. Surrey Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. CapStar Financial pays out 28.0% of its earnings in the form of a dividend. Surrey Bancorp pays out 31.6% 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. CapStar Financial has increased its dividend for 3 consecutive years.
Analyst Recommendations
This is a breakdown of current ratings for CapStar Financial and Surrey Bancorp, as reported by MarketBeat.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
CapStar Financial | 0 | 1 | 0 | 0 | 2.00 |
Surrey Bancorp | 0 | 0 | 0 | 0 | N/A |
CapStar Financial presently has a consensus target price of $15.58, indicating a potential downside of 22.47%. Given CapStar Financial’s higher probable upside, equities research analysts plainly believe CapStar Financial is more favorable than Surrey Bancorp.
Valuation & Earnings
This table compares CapStar Financial and Surrey Bancorp’s revenue, earnings per share (EPS) and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
CapStar Financial | $184.34 million | 2.27 | $29.80 million | $1.57 | 12.80 |
Surrey Bancorp | $16.20 million | 4.23 | $5.10 million | $1.52 | 10.99 |
CapStar Financial has higher revenue and earnings than Surrey Bancorp. Surrey Bancorp is trading at a lower price-to-earnings ratio than CapStar Financial, indicating that it is currently the more affordable of the two stocks.
Summary
CapStar Financial beats Surrey Bancorp on 11 of the 15 factors compared between the two stocks.
About CapStar Financial
CapStar Financial Holdings, Inc. operates as the bank holding company for CapStar Bank that provides banking and other financial services to individuals and corporate customers in Tennessee, the United States. It offers noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, and time deposits; mortgage banking products; and wealth management and treasury management services. The company also provides commercial and residential real estate, construction and land development, commercial and industrial, consumer, non-owner-occupied real estate, home equity, paycheck protection program (PPP), and other loans, as well as business term loans, equipment financing, and lines of credit to small and medium sized businesses. In addition, it offers mobile banking services; and debit and credit cards. CapStar Financial Holdings, Inc. was founded in 2007 and is headquartered in Nashville, Tennessee.
About Surrey Bancorp
Surrey BanCorp engages in the provision of banking solutions through its subsidiaries, Surrey Bank & Trust . It offers checking accounts, savings, deposit services, mortgages, real estate loans, commercial credit products, business checking, and electronic banking. The company was founded on May 1, 2003 and is headquartered in Mount Airy, NC.
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