Critical Comparison: Simmons First National (NASDAQ:SFNC) versus Bank7 (NASDAQ:BSVN)

Simmons First National (NASDAQ:SFNC) and Bank7 (NASDAQ:BSVN) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Volatility and Risk

Simmons First National has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Bank7 has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.

Profitability

This table compares Simmons First National and Bank7’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simmons First National	-25.44%	7.81%	1.07%
Bank7	31.77%	18.18%	2.34%

Analyst Recommendations

This is a summary of current ratings and target prices for Simmons First National and Bank7, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simmons First National	0	5	2	2	2.67
Bank7	0	0	3	1	3.25

Simmons First National presently has a consensus target price of $22.00, suggesting a potential downside of 2.27%. Bank7 has a consensus target price of $54.50, suggesting a potential upside of 17.25%. Given Bank7’s stronger consensus rating and higher probable upside, analysts clearly believe Bank7 is more favorable than Simmons First National.

Dividends

Simmons First National pays an annual dividend of $0.86 per share and has a dividend yield of 3.8%. Bank7 pays an annual dividend of $1.08 per share and has a dividend yield of 2.3%. Simmons First National pays out -33.6% of its earnings in the form of a dividend. Bank7 pays out 23.2% 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 14 consecutive years and Bank7 has raised its dividend for 5 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Simmons First National and Bank7″s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simmons First National	$1.43 billion	2.29	-$397.55 million	($2.56)	-8.79
Bank7	$137.26 million	3.22	$43.07 million	$4.66	9.97

Bank7 has lower revenue, but higher earnings than Simmons First National. Simmons First National is trading at a lower price-to-earnings ratio than Bank7, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

27.6% of Simmons First National shares are owned by institutional investors. Comparatively, 23.5% of Bank7 shares are owned by institutional investors. 0.8% of Simmons First National shares are owned by company insiders. Comparatively, 25.7% of Bank7 shares are owned 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.

Summary

Bank7 beats Simmons First National on 12 of the 18 factors compared between the two stocks.

About Simmons First National

Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.

About Bank7

Bank7 Corp. operates as a bank holding company for Bank7 that provides banking and financial services to individual and corporate customers. It offers commercial deposit, commercial checking, money market, and other deposit accounts; and retail deposit services, such as certificates of deposit, money market accounts, checking accounts, negotiable order of withdrawal accounts, savings accounts, and automated teller machine access. The company also provides commercial real estate, hospitality, energy, and commercial and industrial lending services; consumer lending services to individuals for personal and household purposes comprising residential real estate loans and mortgage banking services, personal lines of credit, loans for the purchase of automobiles, and other installment loans, as well as secured and unsecured term loans and home improvement loans. It operates through a network of full-service branches in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area, and Kansas. The company was formerly known as Haines Financial Corp. Bank7 Corp. was founded in 1901 and is headquartered in Oklahoma City, Oklahoma.