Simmons First National (NASDAQ:SFNC – Get Free Report) and Community Trust Bancorp (NASDAQ:CTBI – Get Free Report) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, risk, analyst recommendations, valuation, institutional ownership and profitability.
Profitability
This table compares Simmons First National and Community Trust Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Simmons First National | -27.83% | 6.73% | 0.91% |
| Community Trust Bancorp | 23.95% | 11.96% | 1.51% |
Analyst Recommendations
This is a summary of recent ratings and target prices for Simmons First National and Community Trust Bancorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Simmons First National | 1 | 3 | 2 | 3 | 2.78 |
| Community Trust Bancorp | 0 | 0 | 3 | 0 | 3.00 |
Dividends
Simmons First National pays an annual dividend of $0.86 per share and has a dividend yield of 4.6%. Community Trust Bancorp pays an annual dividend of $2.12 per share and has a dividend yield of 3.6%. Simmons First National pays out -31.0% of its earnings in the form of a dividend. Community Trust Bancorp pays out 39.0% 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 increased its dividend for 14 consecutive years and Community Trust Bancorp has increased its dividend for 44 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk & Volatility
Simmons First National has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Community Trust Bancorp has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.
Earnings and Valuation
This table compares Simmons First National and Community Trust Bancorp”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Simmons First National | $1.43 billion | 1.90 | -$397.55 million | ($2.77) | -6.75 |
| Community Trust Bancorp | $409.34 million | 2.60 | $98.06 million | $5.43 | 10.79 |
Community Trust Bancorp has lower revenue, but higher earnings than Simmons First National. Simmons First National is trading at a lower price-to-earnings ratio than Community Trust Bancorp, 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, 60.2% of Community Trust Bancorp shares are owned by institutional investors. 1.9% of Simmons First National shares are owned by insiders. Comparatively, 2.3% of Community Trust Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Summary
Community Trust Bancorp 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 Community Trust Bancorp
Community Trust Bancorp, Inc. operates as the bank holding company for Community Trust Bank, Inc. that engages in the provision of commercial and personal banking, and trust and wealth management services to small and mid-sized communities in eastern, northeastern, central, and south-central Kentucky, as well as southern West Virginia, and northeastern Tennessee. The company accepts time and demand deposits, checking accounts, savings accounts and savings certificates, individual retirement accounts and Keogh plans, and money market accounts. Its loan portfolio includes commercial, construction, mortgage, and personal loans; lease-financing, lines of credit, revolving lines of credit, and term loans, as well as other specialized loans, including asset-based financing; residential and commercial real estate loans; and consumer loans. The company also provides cash management, renting safe deposit boxes, and funds transfer services; issues letters of credit; and acts as a trustee of personal trusts, executor of estates, trustee for employee benefit trusts, and paying agent for bond and stock issues, as well as an investment agent and depositor for securities. In addition, it offers securities brokerage services; debit cards; annuity and life insurance products; and repurchase agreements, as well as mobile, internet banking, and e-statement services. The company was founded in 1903 and is headquartered in Pikeville, Kentucky.
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