Financial Review: Eagle Financial Services (NASDAQ:EFSI) and Stock Yards Bancorp (NASDAQ:SYBT)

Eagle Financial Services (NASDAQ:EFSI) and Stock Yards Bancorp (NASDAQ:SYBT) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Dividends

Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.2%. Stock Yards Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 1.8%. Eagle Financial Services pays out 95.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Stock Yards Bancorp pays out 26.9% of its earnings in the form of a dividend. Eagle Financial Services has increased its dividend for 14 consecutive years and Stock Yards Bancorp has increased its dividend for 15 consecutive years.

Valuation & Earnings

This table compares Eagle Financial Services and Stock Yards Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Financial Services	$105.89 million	1.98	$8.21 million	$1.30	30.00
Stock Yards Bancorp	$564.54 million	3.68	$140.15 million	$4.75	14.84

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

Analyst Recommendations

This is a summary of current ratings and price targets for Eagle Financial Services and Stock Yards Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Financial Services	0	2	1	0	2.33
Stock Yards Bancorp	0	5	0	1	2.33

Eagle Financial Services currently has a consensus price target of $42.25, indicating a potential upside of 8.33%. Stock Yards Bancorp has a consensus price target of $79.00, indicating a potential upside of 12.09%. Given Stock Yards Bancorp’s higher possible upside, analysts clearly believe Stock Yards Bancorp is more favorable than Eagle Financial Services.

Volatility & Risk

Eagle Financial Services has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500. Comparatively, Stock Yards Bancorp has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Profitability

This table compares Eagle Financial Services and Stock Yards Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Financial Services	7.76%	9.99%	0.92%
Stock Yards Bancorp	24.83%	13.91%	1.53%

Insider and Institutional Ownership

0.3% of Eagle Financial Services shares are held by institutional investors. Comparatively, 56.5% of Stock Yards Bancorp shares are held by institutional investors. 12.3% of Eagle Financial Services shares are held by company insiders. Comparatively, 3.4% of Stock Yards Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Stock Yards Bancorp beats Eagle Financial Services on 13 of the 17 factors compared between the two stocks.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.

About Stock Yards Bancorp

Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.