Head-To-Head Survey: Simmons First National (NASDAQ:SFNC) and Bank Of Montreal (NYSE:BMO)

Simmons First National (NASDAQ:SFNC) and Bank Of Montreal (NYSE:BMO) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Valuation and Earnings

This table compares Simmons First National and Bank Of Montreal”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simmons First National	$1.43 billion	2.35	-$397.55 million	($2.53)	-9.17
Bank Of Montreal	$38.50 billion	3.16	$6.22 billion	$8.86	19.76

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

Volatility & Risk

Simmons First National has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Bank Of Montreal has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Dividends

Simmons First National pays an annual dividend of $0.86 per share and has a dividend yield of 3.7%. Bank Of Montreal pays an annual dividend of $4.93 per share and has a dividend yield of 2.8%. Simmons First National pays out -34.0% of its earnings in the form of a dividend. Bank Of Montreal pays out 55.6% 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. Simmons First National has raised its dividend for 14 consecutive years and Bank Of Montreal has raised its dividend for 4 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Simmons First National and Bank Of Montreal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simmons First National	-24.64%	8.32%	1.16%
Bank Of Montreal	11.72%	13.60%	0.71%

Insider and Institutional Ownership

27.6% of Simmons First National shares are owned by institutional investors. Comparatively, 45.8% of Bank Of Montreal shares are owned by institutional investors. 0.8% of Simmons First National shares are owned by company insiders. Comparatively, 1.0% of Bank Of Montreal shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Simmons First National and Bank Of Montreal, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simmons First National	1	4	3	1	2.44
Bank Of Montreal	1	6	5	0	2.33

Simmons First National currently has a consensus price target of $25.50, indicating a potential upside of 9.87%. Bank Of Montreal has a consensus price target of $163.00, indicating a potential downside of 6.92%. Given Simmons First National’s stronger consensus rating and higher probable upside, analysts clearly believe Simmons First National is more favorable than Bank Of Montreal.

Summary

Bank Of Montreal beats Simmons First National on 11 of the 18 factors compared between the two stocks.

About Simmons First National

Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.

About Bank Of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.