Comparing SmartFinancial (NASDAQ:SMBK) & First Financial Bankshares (NASDAQ:FFIN)

SmartFinancial (NASDAQ:SMBK) and First Financial Bankshares (NASDAQ:FFIN) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Analyst Recommendations

This is a breakdown of current ratings for SmartFinancial and First Financial Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SmartFinancial	0	4	2	1	2.57
First Financial Bankshares	0	2	2	1	2.80

SmartFinancial currently has a consensus target price of $50.42, indicating a potential downside of 1.26%. First Financial Bankshares has a consensus target price of $36.75, indicating a potential upside of 7.68%. Given First Financial Bankshares’ stronger consensus rating and higher possible upside, analysts clearly believe First Financial Bankshares is more favorable than SmartFinancial.

Dividends

SmartFinancial pays an annual dividend of $0.36 per share and has a dividend yield of 0.7%. First Financial Bankshares pays an annual dividend of $0.88 per share and has a dividend yield of 2.6%. SmartFinancial pays out 10.6% of its earnings in the form of a dividend. First Financial Bankshares pays out 47.1% 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. SmartFinancial has increased its dividend for 3 consecutive years and First Financial Bankshares has increased its dividend for 15 consecutive years. First Financial Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

58.8% of SmartFinancial shares are owned by institutional investors. Comparatively, 69.8% of First Financial Bankshares shares are owned by institutional investors. 6.9% of SmartFinancial shares are owned by insiders. Comparatively, 3.8% of First Financial Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares SmartFinancial and First Financial Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SmartFinancial	12.67%	7.33%	0.71%
First Financial Bankshares	31.03%	14.00%	1.76%

Valuation & Earnings

This table compares SmartFinancial and First Financial Bankshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SmartFinancial	$210.19 million	4.15	$36.14 million	$3.39	15.06
First Financial Bankshares	$833.20 million	5.87	$253.58 million	$1.87	18.25

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

Volatility & Risk

SmartFinancial has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, First Financial Bankshares has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Summary

First Financial Bankshares beats SmartFinancial on 12 of the 16 factors compared between the two stocks.

About SmartFinancial

SmartFinancial, Inc. operates as the bank holding company for SmartBank that provides various financial services to individuals and corporate customers in Tennessee, Alabama, and Florida. It operates through Commercial Real Estate, Consumer Real Estate, Construction and Land Development, Commercial and Industrial, Leases, and Consumer and Other segments. The company offers noninterest-bearing and interest-bearing checking, interest-bearing demand, savings, money market, time deposit, individual retirement accounts, as well as certificates of deposit. It also provides commercial and residential real estate, consumer real estate, and construction and land development loans; commercial and financial loans and leases; commercial business and mortgage loans; and direct consumer installment, educational, agriculture, and other revolving credit loans; equipment financing, heavy equipment, semis, and trailers loans and leases to small and mid-size companies; letters of credit; and overdraft facilities. In addition, the company offers wealth management, insurance, mortgage origination, and internet and mobile banking services. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.

About First Financial Bankshares

First Financial Bankshares, Inc., through its subsidiaries, provides commercial banking products and services in Texas. The company offers checking, savings and time deposits; automated teller machines, drive-in, and night deposit services; safe deposit facilities, remote deposit capture, internet banking, mobile banking, payroll cards, funds transfer, and performing other customary commercial banking services; securities brokerage services; and trust and wealth management services, including wealth management, estates administration, oil and gas management, testamentary trusts, revocable and irrevocable trusts, and agency accounts. It also provides commercial and industrial, municipal, agricultural, construction and development, farm, residential, and consumer auto and non-auto, as well as non-owner occupied and owner occupied commercial real estate loans. In addition, the company offers advisory and specialized services related to asset management, investing, purchasing, advertising, public relations, and technology services. First Financial Bankshares, Inc. was founded in 1890 and is headquartered in Abilene, Texas.