Comparing Five Star Bancorp (NASDAQ:FSBC) & Regions Financial (NYSE:RF)

Regions Financial (NYSE:RF) and Five Star Bancorp (NASDAQ:FSBC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, profitability, valuation and risk.

Dividends

Regions Financial pays an annual dividend of $1.20 per share and has a dividend yield of 4.4%. Five Star Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Regions Financial pays out 49.0% of its earnings in the form of a dividend. Five Star Bancorp pays out 29.6% 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. Regions Financial has raised its dividend for 12 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Regions Financial has a beta of 1.05, meaning that its stock price is 5% more volatile than the S&P 500. Comparatively, Five Star Bancorp has a beta of 0.55, meaning that its stock price is 45% less volatile than the S&P 500.

Earnings and Valuation

This table compares Regions Financial and Five Star Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Regions Financial	$9.61 billion	2.42	$2.16 billion	$2.45	11.16
Five Star Bancorp	$176.60 million	5.99	$61.61 million	$3.38	12.76

Regions Financial has higher revenue and earnings than Five Star Bancorp. Regions Financial is trading at a lower price-to-earnings ratio than Five Star Bancorp, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

79.4% of Regions Financial shares are held by institutional investors. Comparatively, 46.9% of Five Star Bancorp shares are held by institutional investors. 0.3% of Regions Financial shares are held by insiders. Comparatively, 21.8% of Five Star Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Regions Financial and Five Star Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Regions Financial	23.33%	12.88%	1.42%
Five Star Bancorp	25.92%	15.92%	1.45%

Analyst Ratings

This is a summary of recent ratings and price targets for Regions Financial and Five Star Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Regions Financial	3	12	5	0	2.10
Five Star Bancorp	0	3	3	0	2.50

Regions Financial currently has a consensus target price of $31.53, suggesting a potential upside of 15.34%. Five Star Bancorp has a consensus target price of $47.25, suggesting a potential upside of 9.55%. Given Regions Financial’s higher possible upside, equities research analysts plainly believe Regions Financial is more favorable than Five Star Bancorp.

Summary

Five Star Bancorp beats Regions Financial on 9 of the 17 factors compared between the two stocks.

About Regions Financial

Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.