Simmons First National Corporation (NASDAQ: SFNC) and Peoples Bancorp (NASDAQ:PEBO) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Insider and Institutional Ownership

52.1% of Simmons First National Corporation shares are owned by institutional investors. Comparatively, 60.9% of Peoples Bancorp shares are owned by institutional investors. 4.6% of Simmons First National Corporation shares are owned by company insiders. Comparatively, 3.0% of Peoples Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Simmons First National Corporation and Peoples Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Simmons First National Corporation $406.42 million 4.09 $97.61 million $3.03 17.01
Peoples Bancorp $157.17 million 3.50 $33.33 million $1.85 16.49

Simmons First National Corporation has higher revenue and earnings than Peoples Bancorp. Peoples Bancorp is trading at a lower price-to-earnings ratio than Simmons First National Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Simmons First National Corporation and Peoples Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Simmons First National Corporation 21.03% 8.71% 1.19%
Peoples Bancorp 19.67% 7.63% 0.98%

Dividends

Simmons First National Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Peoples Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.9%. Simmons First National Corporation pays out 33.0% of its earnings in the form of a dividend. Peoples Bancorp pays out 47.6% 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.

Volatility and Risk

Simmons First National Corporation has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, Peoples Bancorp has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Simmons First National Corporation and Peoples Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Simmons First National Corporation 0 2 2 0 2.50
Peoples Bancorp 0 3 0 0 2.00

Simmons First National Corporation presently has a consensus price target of $62.33, indicating a potential upside of 20.92%. Peoples Bancorp has a consensus price target of $32.50, indicating a potential upside of 6.52%. Given Simmons First National Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Simmons First National Corporation is more favorable than Peoples Bancorp.

Summary

Simmons First National Corporation beats Peoples Bancorp on 13 of the 16 factors compared between the two stocks.

Simmons First National Corporation Company Profile

Simmons First National Corporation is a financial holding company. The Company, through its subsidiary bank, Simmons Bank, provides financial services to individuals and businesses throughout the market areas they serve. As of December 31, 2016, Simmons Bank conducted banking operations through 150 financial centers located in communities throughout Arkansas, Kansas, Missouri and Tennessee. Simmons Bank offers consumer, real estate and commercial loans, checking and savings deposits. Simmons Bank and its subsidiaries have also developed products and services, which include credit cards, trust and fiduciary services, investments, agricultural finance lending, equipment lending, insurance and small business administration lending. The securities within the portfolio are classified as either held-to-maturity, available-for-sale or trading. The Company offers deposits, including non-interest bearing transaction accounts; interest bearing transaction accounts, and time deposits.

Peoples Bancorp Company Profile

Peoples Bancorp Inc. is a financial holding company. The Company operates principally through its subsidiary, Peoples Bank. Peoples Bank’s operating subsidiaries include Peoples Insurance Agency, LLC (Peoples Insurance) and two asset management companies, PBNA, L.L.C. and Peoples Tax Credit Equity, LLC. Peoples Investment Company has one subsidiary, Peoples Capital Corporation. The Company offers banking, insurance, investment and trust solutions. Its products and services include various demand deposit accounts, savings accounts, money market accounts and certificates of deposit; commercial, consumer and real estate mortgage loans (both commercial and residential) and lines of credit; debit and automated teller machine (ATM) cards; credit cards for individuals and businesses; merchant credit card transaction processing services; corporate and personal trust services; a range of life, health and property and casualty insurance products, and brokerage services.

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