Southern First Bancshares (NASDAQ:SFST) vs. Guaranty Bancshares (NASDAQ:GNTY) Critical Review

Guaranty Bancshares (NASDAQ:GNTY) and Southern First Bancshares (NASDAQ:SFST) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, dividends, valuation, analyst recommendations, earnings and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Guaranty Bancshares	15.56%	8.74%	0.82%
Southern First Bancshares	6.69%	4.33%	0.33%

Valuation & Earnings

This table compares Guaranty Bancshares and Southern First Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Guaranty Bancshares	$179.01 million	1.89	$30.04 million	$2.44	12.04
Southern First Bancshares	$187.46 million	1.24	$13.43 million	$1.64	17.32

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

Risk & Volatility

Guaranty Bancshares has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, Southern First Bancshares has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Guaranty Bancshares and Southern First Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Guaranty Bancshares	0	2	1	0	2.33
Southern First Bancshares	0	0	1	0	3.00

Guaranty Bancshares currently has a consensus target price of $33.33, indicating a potential upside of 13.46%. Southern First Bancshares has a consensus target price of $44.00, indicating a potential upside of 54.93%. Given Southern First Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe Southern First Bancshares is more favorable than Guaranty Bancshares.

Insider and Institutional Ownership

39.4% of Guaranty Bancshares shares are owned by institutional investors. Comparatively, 75.0% of Southern First Bancshares shares are owned by institutional investors. 26.4% of Guaranty Bancshares shares are owned by insiders. Comparatively, 7.6% of Southern First Bancshares shares are owned by 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

Guaranty Bancshares beats Southern First Bancshares on 7 of the 13 factors compared between the two stocks.

About Guaranty Bancshares

Guaranty Bancshares, Inc. operates as the bank holding company for Guaranty Bank & Trust, N.A. that provides a range of commercial and consumer banking products and services for small- and medium-sized businesses, professionals, and individuals. The company offers checking and savings, money market, and business accounts, as well as certificates of deposit; and commercial and industrial, construction and development, 1-4 family residential, commercial real estate, farmland, agricultural, multi-family residential, and consumer loans. It also provides trustee, custodial and escrow, investment management, retirement plan, ATM, night depository, direct deposit, and cashier's check services, as well as online and mobile banking services; debit cards; letters of credit; and treasury management services, including wire transfer, positive pay, remote deposit capture, and automated clearinghouse services. Guaranty Bancshares, Inc. was founded in 1913 and is headquartered in Addison, Texas.

About Southern First Bancshares

Southern First Bancshares, Inc. operates as the bank holding company for Southern First Bank that provides commercial, consumer, and mortgage loans to the general public in South Carolina, North Carolina, and Georgia. The company accepts various deposit products that include checking accounts, commercial checking accounts, and savings accounts, as well as other time deposits, including daily money market accounts and long-term certificates of deposit. Its loan portfolio comprises commercial real estate loans; construction real estate loans; commercial business loans for various lines of businesses, such as the manufacturing, service industry, and professional service areas; consumer real estate and home equity loans; and other consumer loans, including secured and unsecured installment loans and revolving lines of credit. In addition, the company provides other bank services, such as internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment, and mobile banking services. Southern First Bancshares, Inc. was incorporated in 1999 and is headquartered in Greenville, South Carolina.