Investar Holding Corporation (NASDAQ: ISTR) and Stock Yards Bancorp (NASDAQ:SYBT) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Volatility and Risk

Investar Holding Corporation has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500. Comparatively, Stock Yards Bancorp has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Dividends

Investar Holding Corporation pays an annual dividend of $0.12 per share and has a dividend yield of 0.5%. Stock Yards Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.1%. Investar Holding Corporation pays out 12.2% of its earnings in the form of a dividend. Stock Yards Bancorp pays out 42.1% 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Investar Holding Corporation 14.88% 6.05% 0.70%
Stock Yards Bancorp 28.57% 13.66% 1.43%

Valuation and Earnings

This table compares Investar Holding Corporation and Stock Yards Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Investar Holding Corporation $48.62 million 4.19 $7.88 million $0.98 23.88
Stock Yards Bancorp $145.71 million 6.00 $41.02 million $1.90 20.29

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Investar Holding Corporation and Stock Yards Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Investar Holding Corporation 0 1 1 0 2.50
Stock Yards Bancorp 0 1 0 0 2.00

Investar Holding Corporation presently has a consensus price target of $26.00, suggesting a potential upside of 11.11%. Stock Yards Bancorp has a consensus price target of $38.00, suggesting a potential downside of 1.43%. Given Investar Holding Corporation’s stronger consensus rating and higher probable upside, equities analysts clearly believe Investar Holding Corporation is more favorable than Stock Yards Bancorp.

Insider & Institutional Ownership

61.0% of Investar Holding Corporation shares are owned by institutional investors. Comparatively, 48.0% of Stock Yards Bancorp shares are owned by institutional investors. 9.8% of Investar Holding Corporation 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 stock is poised for long-term growth.

Summary

Stock Yards Bancorp beats Investar Holding Corporation on 9 of the 16 factors compared between the two stocks.

Investar Holding Corporation Company Profile

Investar Holding Corporation is financial holding company that conducts its operations through, Investar Bank (the Bank), which is a commercial bank. The Company offers a range of commercial and retail lending products throughout its market areas, including business loans to small to medium-sized businesses, as well as loans to individuals. It serves its primary markets of Baton Rouge, New Orleans, Hammond and Lafayette, Louisiana, and their surrounding metropolitan areas from its office located in Baton Rouge and from approximately 10 additional service branches. The Bank’s other banking services include cashiers’ checks, direct deposit of payroll and Social Security checks, night depository, bank-by-mail, automated teller machines with deposit automation and debit cards. The Company’s business lending products include owner-occupied commercial real estate loans, construction loans, and commercial and industrial loans, such as term loans, equipment financing and lines of credit.

Stock Yards Bancorp Company Profile

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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