BancorpSouth (NYSE: BXS) and Stock Yards Bancorp (NASDAQ:SYBT) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, dividends, earnings, profitabiliy, valuation, institutional ownership and analyst recommendations.

Dividends

BancorpSouth pays an annual dividend of $0.50 per share and has a dividend yield of 1.6%. Stock Yards Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.1%. BancorpSouth pays out 31.6% of its earnings in the form of a dividend. Stock Yards Bancorp pays out 43.5% 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. Stock Yards Bancorp has raised its dividend for 4 consecutive years. Stock Yards Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares BancorpSouth and Stock Yards Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BancorpSouth $738.08 million 3.76 $144.32 million $1.58 19.21
Stock Yards Bancorp $135.76 million 6.33 $41.69 million $1.84 20.60

BancorpSouth has higher revenue and earnings than Stock Yards Bancorp. BancorpSouth is trading at a lower price-to-earnings ratio than Stock Yards Bancorp, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

67.6% of BancorpSouth shares are owned by institutional investors. Comparatively, 48.6% of Stock Yards Bancorp shares are owned by institutional investors. 2.6% of BancorpSouth shares are owned by insiders. Comparatively, 6.2% of Stock Yards Bancorp 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.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for BancorpSouth and Stock Yards Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BancorpSouth 0 8 2 0 2.20
Stock Yards Bancorp 0 1 0 0 2.00

BancorpSouth currently has a consensus price target of $28.80, suggesting a potential downside of 5.11%. Stock Yards Bancorp has a consensus price target of $38.00, suggesting a potential upside of 0.26%. Given Stock Yards Bancorp’s higher possible upside, analysts clearly believe Stock Yards Bancorp is more favorable than BancorpSouth.

Profitability

This table compares BancorpSouth and Stock Yards Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BancorpSouth 19.19% 8.65% 1.02%
Stock Yards Bancorp 28.30% 13.43% 1.41%

Volatility & Risk

BancorpSouth has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500. Comparatively, Stock Yards Bancorp has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500.

Summary

Stock Yards Bancorp beats BancorpSouth on 10 of the 17 factors compared between the two stocks.

About BancorpSouth

BancorpSouth, Inc. is a financial holding company. The Company, through its principal bank subsidiary, BancorpSouth Bank (the Bank), conducts commercial banking and financial services operations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee, Texas and Illinois. The Company’s segments include Community Banking, Insurance Agencies, and General Corporate and Other. Its Community Banking segment provides a range of deposit products, commercial loans and consumer loans. Its Insurance Agencies segment serves as agents in the sale of commercial lines of insurance and full lines of property and casualty, life, health and employee benefits products and services. Its General Corporate and Other segment includes mortgage banking, trust services, credit card activities, investment services and other activities not allocated to the Community Banking or Insurance Agencies segments.

About Stock Yards Bancorp

Stock Yards Bancorp, Inc. is the holding company for Stock Yards Bank & Trust Company (the Bank). The Bank is a state chartered bank. The Company operates through two segments: commercial banking, and wealth management and trust. The commercial banking segment provides a full range of loan and deposit products to individual consumers and businesses, plus origination of consumer mortgages and securities brokerage activity. The wealth management and trust segment provides investment management, trust and estate administration, and retirement plan services. The Bank provides commercial and personal banking services in the Louisville, Kentucky, Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets through 37 full service banking offices, as of December 31, 2016. The Bank also originates and sells single-family residential mortgages. Additionally, the Bank offers securities brokerage services via its branch network through an arrangement with a third party broker-dealer.

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