Critical Survey: South Atlantic Bancshares (OTCMKTS:SABK) versus Trustmark (NASDAQ:TRMK)

Trustmark (NASDAQ:TRMK) and South Atlantic Bancshares (OTCMKTS:SABK) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Risk & Volatility

Trustmark has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, South Atlantic Bancshares has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500.

Dividends

Trustmark pays an annual dividend of $0.96 per share and has a dividend yield of 2.4%. South Atlantic Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. Trustmark pays out 26.2% of its earnings in the form of a dividend. South Atlantic Bancshares pays out 5.3% 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. Trustmark has raised its dividend for 1 consecutive years. Trustmark is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

67.6% of Trustmark shares are owned by institutional investors. Comparatively, 13.3% of South Atlantic Bancshares shares are owned by institutional investors. 1.5% of Trustmark shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Trustmark and South Atlantic Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trustmark	19.82%	10.90%	1.21%
South Atlantic Bancshares	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings for Trustmark and South Atlantic Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trustmark	0	3	3	0	2.50
South Atlantic Bancshares	0	1	0	0	2.00

Trustmark currently has a consensus price target of $42.25, suggesting a potential upside of 5.84%. Given Trustmark’s stronger consensus rating and higher possible upside, equities analysts clearly believe Trustmark is more favorable than South Atlantic Bancshares.

Valuation and Earnings

This table compares Trustmark and South Atlantic Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trustmark	$949.48 million	2.52	$223.01 million	$3.66	10.91
South Atlantic Bancshares	$93.28 million	1.58	$14.21 million	$1.89	10.36

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

Summary

Trustmark beats South Atlantic Bancshares on 16 of the 17 factors compared between the two stocks.

About Trustmark

Trustmark Corporation operates as the bank holding company for Trustmark National Bank that provides banking and other financial solutions to individuals and corporate institutions in the United States. The company operates through three segments: General Banking, Wealth Management, and Insurance. It offers checking, savings, and money market accounts; certificates of deposits and individual retirement accounts; financing for commercial and industrial projects, income-producing commercial real estate, owner-occupied real estate, and construction and land development; and installment and real estate loans, and lines of credit, as well as treasury management services. The company also provides mortgage banking services, including construction financing, production of conventional and government-insured mortgages, and secondary marketing and mortgage servicing. In addition, it provides wealth management and trust services, such as administration of personal trusts and estates; management of investment accounts for individuals, employee benefit plans, and charitable foundations; and corporate trust and institutional custody, securities brokerage, financial and estate planning, retirement plan, and investment management services. Further, the company offers business insurance products and services for medical professionals, construction, manufacturing, hospitality, real estate, and group life and health plans; and life and health insurance, and personal line policies for individual customers. Trustmark Corporation was founded in 1889 and is headquartered in Jackson, Mississippi.

About South Atlantic Bancshares

South Atlantic Bancshares, Inc. operates as the bank holding company for South Atlantic Bank that provides consumer and commercial banking products and services to individuals, small businesses, and corporations in South Carolina. The company offers checking, money market, and saving accounts, as well as certificate of deposit, individual retirement, and health saving accounts; personal, auto, and recreation loans, as well as home equity and ready reserve overdraft line of credits, and commercial lending products; and credit cards. It also provides cash management and merchant card services; remote deposit capture and automated clearing house services; online, mobile, and telephone banking services; personal and business checks; mortgage products and services; and wealth management services. The company operates offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, and Beaufort, South Carolina. South Atlantic Bancshares, Inc. was founded in 2007 and is headquartered in Myrtle Beach, South Carolina.