Critical Analysis: South Plains Financial (NASDAQ:SPFI) vs. John Marshall Bancorp (NASDAQ:JMSB)

South Plains Financial (NASDAQ:SPFI) and John Marshall Bancorp (NASDAQ:JMSB) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Dividends

South Plains Financial pays an annual dividend of $0.72 per share and has a dividend yield of 1.6%. John Marshall Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. South Plains Financial pays out 19.6% of its earnings in the form of a dividend. John Marshall Bancorp pays out 23.1% 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. South Plains Financial has increased its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for South Plains Financial and John Marshall Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Plains Financial	0	1	6	0	2.86
John Marshall Bancorp	0	1	2	1	3.00

South Plains Financial presently has a consensus price target of $49.60, indicating a potential upside of 12.60%. John Marshall Bancorp has a consensus price target of $25.00, indicating a potential upside of 7.48%. Given South Plains Financial’s higher possible upside, research analysts clearly believe South Plains Financial is more favorable than John Marshall Bancorp.

Profitability

This table compares South Plains Financial and John Marshall Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Plains Financial	20.79%	12.36%	1.37%
John Marshall Bancorp	20.41%	9.16%	1.04%

Earnings & Valuation

This table compares South Plains Financial and John Marshall Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Plains Financial	$296.89 million	2.80	$58.47 million	$3.67	12.00
John Marshall Bancorp	$115.33 million	2.85	$21.23 million	$1.73	13.45

South Plains Financial has higher revenue and earnings than John Marshall Bancorp. South Plains Financial is trading at a lower price-to-earnings ratio than John Marshall Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

South Plains Financial has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500. Comparatively, John Marshall Bancorp has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Institutional & Insider Ownership

54.9% of South Plains Financial shares are held by institutional investors. Comparatively, 39.1% of John Marshall Bancorp shares are held by institutional investors. 24.3% of South Plains Financial shares are held by insiders. Comparatively, 12.6% of John Marshall Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

South Plains Financial beats John Marshall Bancorp on 12 of the 18 factors compared between the two stocks.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.

About John Marshall Bancorp

John Marshall Bancorp, Inc. is the bank holding company for John Marshall Bank. The Bank is headquartered in Reston, Virginia with eight full-service branches located in Alexandria, Arlington, Loudoun, Prince William, Reston, and Tysons, Virginia, as well as Rockville, Maryland, and Washington, D.C. The Bank is dedicated to providing exceptional value, personalized service and convenience to local businesses and professionals in the Washington, D.C. Metropolitan area. The Bank offers a comprehensive line of sophisticated banking products and services that rival those of the largest banks along with experienced staff to help achieve customers’ financial goals. Dedicated relationship managers serve as direct points-of-contact, providing subject matter expertise in a variety of niche industries including charter and private schools, government contractors, health services, nonprofits and associations, professional services, property management companies and title companies