Head to Head Analysis: Renasant (NYSE:RNST) versus Isabella Bank (NASDAQ:ISBA)

Isabella Bank (NASDAQ:ISBA) and Renasant (NYSE:RNST) are both financial services companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Dividends

Isabella Bank pays an annual dividend of $1.12 per share and has a dividend yield of 2.8%. Renasant pays an annual dividend of $0.92 per share and has a dividend yield of 2.7%. Isabella Bank pays out 45.5% of its earnings in the form of a dividend. Renasant pays out 46.2% 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. Isabella Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations for Isabella Bank and Renasant, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Isabella Bank	0	1	1	1	3.00
Renasant	0	1	0	1	3.00

Isabella Bank presently has a consensus price target of $38.50, indicating a potential downside of 3.29%. Given Isabella Bank’s higher possible upside, equities research analysts clearly believe Isabella Bank is more favorable than Renasant.

Volatility & Risk

Isabella Bank has a beta of 0.12, meaning that its stock price is 88% less volatile than the S&P 500. Comparatively, Renasant has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.

Profitability

This table compares Isabella Bank and Renasant’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Isabella Bank	16.65%	8.12%	0.83%
Renasant	11.26%	6.99%	1.01%

Valuation and Earnings

This table compares Isabella Bank and Renasant”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Isabella Bank	$104.55 million	2.80	$13.89 million	$2.46	16.18
Renasant	$874.43 million	3.70	$195.46 million	$1.99	17.09

Renasant has higher revenue and earnings than Isabella Bank. Isabella Bank is trading at a lower price-to-earnings ratio than Renasant, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

77.3% of Renasant shares are owned by institutional investors. 9.7% of Isabella Bank shares are owned by insiders. Comparatively, 2.8% of Renasant shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Isabella Bank beats Renasant on 9 of the 15 factors compared between the two stocks.

About Isabella Bank

Isabella Bank Corporation operates as the bank holding company for Isabella Bank that provides various banking products and services to businesses, institutions, and individuals and their families. Its deposit products include checking accounts, savings accounts, certificates of deposit, direct deposits, and money market accounts. The company’s loan portfolio comprises commercial, agricultural, and residential real estate loans, as well as consumer loans, including secured and unsecured personal loans. It also offers cash management, mobile and internet banking, electronic bill pay, automated teller machines, trust and investment, estate planning, and safe deposit box rental services; and group life, health, accident, disability, and other insurance products, as well as other employee benefit programs. As of December 31, 2021, the company operated 30 banking offices in Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties. Isabella Bank Corporation was founded in 1903 and is headquartered in Mount Pleasant, Michigan.

About Renasant

Renasant Corporation operates as a bank holding company for Renasant Bank that provides a range of financial, wealth management, fiduciary, and insurance services to retail and commercial customers. It operates through three segments: Community Banks, Insurance, and Wealth Management. The Community Banks segment offers checking and savings accounts, business and personal loans, asset-based lending, and equipment leasing services, as well as safe deposit and night depository facilities. It also provides commercial, financial, and agricultural loans; equipment financing and leasing; real estate–1-4 family mortgage; real estate–commercial mortgage; real estate–construction loans for the construction of single family residential properties, multi-family properties, and commercial projects; installment loans to individuals; and interim construction loans, as well as automated teller machine (ATM), online and mobile banking, call center, and treasury management services. The Insurance segment provides insurance agency services, such as commercial and personal insurance products through insurance carriers. The Wealth Management segment offers a range of wealth management and fiduciary services, including administration and management of trust accounts, such as personal and corporate benefit accounts, and custodial accounts, as well as accounting and money management for trust accounts; annuities, mutual funds, and other investment services through a third party broker-dealer; and qualified retirement plans, IRAs, employee benefit plans, personal trusts, and estates. As of December 31, 2021, the company operated a network of 189 banking, lending, and mortgage offices located in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee; 150 full-service branches and 11 limited-service branches; 173 ATMs; and 38 interactive teller machines. Renasant Corporation was founded in 1904 and is headquartered in Tupelo, Mississippi.