Contrasting ServisFirst Bancshares (NYSE:SFBS) and LifeStore Financial Group (OTCMKTS:LSFG)

LifeStore Financial Group (OTCMKTS:LSFG) and ServisFirst Bancshares (NYSE:SFBS) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations for LifeStore Financial Group and ServisFirst Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LifeStore Financial Group	0	0	0	0	0.00
ServisFirst Bancshares	0	1	2	2	3.20

ServisFirst Bancshares has a consensus target price of $91.00, suggesting a potential upside of 6.35%. Given ServisFirst Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe ServisFirst Bancshares is more favorable than LifeStore Financial Group.

Profitability

This table compares LifeStore Financial Group and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LifeStore Financial Group	N/A	N/A	N/A
ServisFirst Bancshares	26.95%	16.36%	1.61%

Insider & Institutional Ownership

67.3% of ServisFirst Bancshares shares are held by institutional investors. 12.2% of LifeStore Financial Group shares are held by company insiders. Comparatively, 6.7% of ServisFirst Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares LifeStore Financial Group and ServisFirst Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LifeStore Financial Group	$33.78 million	N/A	$5.56 million	N/A	N/A
ServisFirst Bancshares	$1.02 billion	4.59	$276.60 million	$5.06	16.91

ServisFirst Bancshares has higher revenue and earnings than LifeStore Financial Group.

Dividends

LifeStore Financial Group pays an annual dividend of $0.65 per share and has a dividend yield of 1.3%. ServisFirst Bancshares pays an annual dividend of $1.52 per share and has a dividend yield of 1.8%. ServisFirst Bancshares pays out 30.0% of its earnings in the form of a dividend. ServisFirst Bancshares has raised its dividend for 10 consecutive years. ServisFirst Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

LifeStore Financial Group has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.

Summary

ServisFirst Bancshares beats LifeStore Financial Group on 13 of the 15 factors compared between the two stocks.

About LifeStore Financial Group

LifeStore Financial Group, Inc. operates as a federally chartered thrift holding company for LifeStore Bank that provides personal and business banking products and services in North Carolina. The company offers checking, savings, and money market accounts, as well as certificates of deposit; mortgage loans, automobile loans, home equity lines of credit, commercial real estate loans, commercial construction loans, investment property loans, equipment loans, working capital loans/lines of credit, and small business administration loans; and credit cards. It also provides insurance agency products and services; investment and cash management services; and online and mobile banking services. The company was formerly known as AF Financial Group and changed its name to LifeStore Financial Group, Inc. in September 2009. LifeStore Financial Group, Inc. was founded in 1939 and is headquartered in West Jefferson, North Carolina. Lifestore Financial Group, Inc. operates as a subsidiary of AsheCo MHC, Inc.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.