Head-To-Head Survey: Sumitomo Mitsui Trust (OTCMKTS:SUTNY) & ServisFirst Bancshares (NYSE:SFBS)

Sumitomo Mitsui Trust (OTCMKTS:SUTNY) and ServisFirst Bancshares (NYSE:SFBS) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Dividends

Sumitomo Mitsui Trust pays an annual dividend of $0.10 per share and has a dividend yield of 1.9%. ServisFirst Bancshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.9%. Sumitomo Mitsui Trust pays out 23.3% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 24.3% 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. ServisFirst Bancshares has raised its dividend for 10 consecutive years. Sumitomo Mitsui Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Sumitomo Mitsui Trust and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sumitomo Mitsui Trust	11.81%	10.45%	0.45%
ServisFirst Bancshares	32.53%	17.66%	1.89%

Analyst Recommendations

This is a summary of recent ratings and target prices for Sumitomo Mitsui Trust and ServisFirst Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sumitomo Mitsui Trust	0	1	0	0	2.00
ServisFirst Bancshares	1	0	4	0	2.60

ServisFirst Bancshares has a consensus price target of $46.50, indicating a potential upside of 13.59%. Given ServisFirst Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe ServisFirst Bancshares is more favorable than Sumitomo Mitsui Trust.

Institutional & Insider Ownership

67.3% of ServisFirst Bancshares shares are owned by institutional investors. 6.5% of ServisFirst Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Sumitomo Mitsui Trust and ServisFirst Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sumitomo Mitsui Trust	$19.82 billion	1.50	$1.99 billion	$0.43	12.49
ServisFirst Bancshares	$1.02 billion	4.40	$276.60 million	$3.13	13.08

Sumitomo Mitsui Trust has higher revenue and earnings than ServisFirst Bancshares. Sumitomo Mitsui Trust is trading at a lower price-to-earnings ratio than ServisFirst Bancshares, indicating that it is currently the more affordable of the two stocks.

Summary

ServisFirst Bancshares beats Sumitomo Mitsui Trust on 12 of the 16 factors compared between the two stocks.

About Sumitomo Mitsui Trust

Sumitomo Mitsui Trust Group, Inc. is a Japan-based financial holding company whose businesses include banking, asset management, investor services and real estate. Its offerings include trust and banking services, investment products, pension and custody services, securities administration, and real estate brokerage and consulting. The group serves individuals, businesses, institutional investors and public-sector clients, primarily in Japan. It also maintains international operations to support cross-border banking, asset management and investor services.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. is a bank holding company headquartered in Birmingham, Alabama. Through its subsidiary, ServisFirst Bank, the company provides commercial and consumer banking services, with a focus on serving businesses, professionals and individuals. Its offerings include commercial and consumer loans, deposit accounts, treasury and cash-management services, and online and mobile banking. The bank also provides services such as wealth management and mortgage lending. Founded in 2005, ServisFirst Bank has expanded beyond Alabama into markets across the southeastern United States, including Florida, Georgia, North Carolina, South Carolina and Tennessee.