Critical Comparison: South Plains Financial (NASDAQ:SPFI) & First Guaranty Bancshares (NASDAQ:FGBI)

South Plains Financial (NASDAQ:SPFI) and First Guaranty Bancshares (NASDAQ:FGBI) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, institutional ownership, analyst recommendations and risk.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for South Plains Financial and First Guaranty Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Plains Financial	0	1	5	1	3.00
First Guaranty Bancshares	1	1	0	0	1.50

South Plains Financial currently has a consensus price target of $49.60, suggesting a potential upside of 15.24%. Given South Plains Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe South Plains Financial is more favorable than First Guaranty Bancshares.

Profitability

This table compares South Plains Financial and First Guaranty Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Plains Financial	21.23%	12.36%	1.40%
First Guaranty Bancshares	9.17%	10.67%	0.52%

Earnings and Valuation

This table compares South Plains Financial and First Guaranty Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Plains Financial	$296.89 million	2.73	$58.47 million	$3.77	11.42
First Guaranty Bancshares	$105.38 million	2.05	-$56.02 million	$1.28	10.21

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

Risk & Volatility

South Plains Financial has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, First Guaranty Bancshares has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.

Dividends

South Plains Financial pays an annual dividend of $0.76 per share and has a dividend yield of 1.8%. First Guaranty Bancshares pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. South Plains Financial pays out 20.2% of its earnings in the form of a dividend. First Guaranty Bancshares pays out 3.1% 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. South Plains Financial has increased its dividend for 5 consecutive years. South Plains Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

54.9% of South Plains Financial shares are owned by institutional investors. Comparatively, 39.5% of First Guaranty Bancshares shares are owned by institutional investors. 24.3% of South Plains Financial shares are owned by company insiders. Comparatively, 49.4% of First Guaranty Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

South Plains Financial beats First Guaranty Bancshares on 16 of the 18 factors compared between the two stocks.

About South Plains Financial

South Plains Financial, Inc. is a bank holding company headquartered in Lubbock, Texas, and the parent company of City Bank. Through City Bank, it provides banking and related financial services to individuals, businesses and other organizations. Its services include personal and commercial deposit accounts, lending, mortgage banking, treasury management and wealth-related services. The company serves customers primarily in Texas and New Mexico through its branch network and other banking channels.

About First Guaranty Bancshares

First Guaranty Bancshares, Inc. is a bank holding company headquartered in Hammond, Louisiana. It operates through its principal subsidiary, First Guaranty Bank, a community-focused financial institution serving individuals, businesses and organizations. First Guaranty Bank offers traditional banking products and services, including checking and savings accounts, certificates of deposit, commercial and consumer lending, mortgage loans, online and mobile banking, cash-management services and other treasury-management solutions.