Business First Bancshares (NASDAQ:BFST – Get Free Report) and SR Bancorp (NASDAQ:SRBK – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.
Volatility and Risk
Business First Bancshares has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, SR Bancorp has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current recommendations for Business First Bancshares and SR Bancorp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Business First Bancshares | 0 | 0 | 4 | 0 | 3.00 |
| SR Bancorp | 0 | 2 | 0 | 0 | 2.00 |
Profitability
This table compares Business First Bancshares and SR Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Business First Bancshares | 17.01% | 11.41% | 1.13% |
| SR Bancorp | 5.82% | 1.27% | 0.22% |
Earnings and Valuation
This table compares Business First Bancshares and SR Bancorp”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Business First Bancshares | $516.55 million | 1.63 | $87.86 million | $2.79 | 10.19 |
| SR Bancorp | $48.54 million | 2.91 | $5.14 million | $0.36 | 47.06 |
Business First Bancshares has higher revenue and earnings than SR Bancorp. Business First Bancshares is trading at a lower price-to-earnings ratio than SR Bancorp, indicating that it is currently the more affordable of the two stocks.
Dividends
Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.1%. SR Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Business First Bancshares pays out 21.5% of its earnings in the form of a dividend. SR Bancorp pays out 55.6% 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. Business First Bancshares has raised its dividend for 2 consecutive years. Business First Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
47.4% of Business First Bancshares shares are owned by institutional investors. Comparatively, 24.7% of SR Bancorp shares are owned by institutional investors. 5.7% of Business First Bancshares shares are owned by insiders. Comparatively, 7.8% of SR Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Summary
Business First Bancshares beats SR Bancorp on 14 of the 17 factors compared between the two stocks.
About Business First Bancshares
Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.
About SR Bancorp
SR Bancorp, Inc. operates as the holding company for Somerset Regal Bank that provides customary retail and commercial banking services to individuals, businesses, and local municipalities in the communities of Somerset, Middlesex, Hunterdon, and Essex counties in New Jersey. It offers deposit instruments, including noninterest-bearing demand deposits, interest-bearing demand accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides loans comprising one- to four family-residential mortgage loans, home equity loans and lines of credit, unsecured personal loans, and rehabilitation loans; and bill payment services. In addition, it is involved in the investment activities. The company was founded in 1887 and is headquartered in Bound Brook, New Jersey.
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