Summit Financial Group (NASDAQ: SMMF) and American River Bankshares (NASDAQ:AMRB) are both small-cap financials companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.
This is a breakdown of current ratings for Summit Financial Group and American River Bankshares, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Summit Financial Group||0||2||0||0||2.00|
|American River Bankshares||1||1||0||0||1.50|
Insider and Institutional Ownership
22.8% of Summit Financial Group shares are owned by institutional investors. Comparatively, 53.8% of American River Bankshares shares are owned by institutional investors. 22.8% of Summit Financial Group shares are owned by insiders. Comparatively, 12.5% of American River Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Risk & Volatility
Summit Financial Group has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, American River Bankshares has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.
Earnings and Valuation
This table compares Summit Financial Group and American River Bankshares’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Summit Financial Group||$75.69 million||4.26||$17.29 million||$1.20||21.63|
|American River Bankshares||$22.01 million||4.43||$6.40 million||$0.49||31.20|
Summit Financial Group has higher revenue and earnings than American River Bankshares. Summit Financial Group is trading at a lower price-to-earnings ratio than American River Bankshares, indicating that it is currently the more affordable of the two stocks.
Summit Financial Group pays an annual dividend of $0.44 per share and has a dividend yield of 1.7%. American River Bankshares pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Summit Financial Group pays out 36.7% of its earnings in the form of a dividend. American River Bankshares pays out 40.8% 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. Summit Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Summit Financial Group and American River Bankshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Summit Financial Group||27.93%||12.14%||1.13%|
|American River Bankshares||14.53%||5.82%||0.73%|
Summit Financial Group beats American River Bankshares on 11 of the 15 factors compared between the two stocks.
About Summit Financial Group
Summit Financial Group, Inc. (Summit) is a financial holding company. The Company provides community banking services primarily in the Eastern Panhandle and South Central regions of West Virginia and the Shenandoah Valley, and Northern region of Virginia. The Company provides these services through its community bank subsidiary, Summit Community Bank (Summit Community or the Bank). The Company operates through two segments: community banking, and insurance & financial services. The community banking segment consists of its full service banks, which offer customers traditional banking products and services through various delivery channels. The insurance & financial services segment includes three insurance agency offices that sell insurance products. The Company also operates Summit Insurance Services, LLC in Moorefield, West Virginia and Leesburg, Virginia, which provides insurance brokerage services to individuals and businesses.
About American River Bankshares
American River Bankshares is a bank holding company. The Company’s banking subsidiary is American River Bank (the Bank). The Bank’s primary business is serving the commercial banking needs of small to mid-sized businesses. The Bank accepts checking and savings deposits; offers money market deposit accounts and certificates of deposit; makes secured and unsecured commercial loans, secured real estate loans, and other installment and term loans, and offers other customary banking services. The Bank also conducts lease financing for various types of business equipment, from computer software to heavy earth-moving equipment. It serves various communities located in Sacramento, Placer, Yolo, El Dorado, Sonoma and Amador counties. It also serves Alameda, Contra Costa and Santa Clara Counties through loan production offices located in the Cities of San Jose and San Ramon. Its loans include real estate construction loans; lease financing receivable; agriculture loans, and consumer loans.
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