Head to Head Survey: Southern Missouri Bancorp (NASDAQ:SMBC) and West Bancorporation (NASDAQ:WTBA)

West Bancorporation (NASDAQ:WTBA) and Southern Missouri Bancorp (NASDAQ:SMBC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Profitability

This table compares West Bancorporation and Southern Missouri Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Bancorporation	16.04%	13.40%	0.80%
Southern Missouri Bancorp	19.86%	11.57%	1.25%

Institutional and Insider Ownership

44.3% of West Bancorporation shares are owned by institutional investors. Comparatively, 49.5% of Southern Missouri Bancorp shares are owned by institutional investors. 4.6% of West Bancorporation shares are owned by insiders. Comparatively, 15.8% of Southern Missouri Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

West Bancorporation has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Southern Missouri Bancorp has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Dividends

West Bancorporation pays an annual dividend of $1.00 per share and has a dividend yield of 4.5%. Southern Missouri Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. West Bancorporation pays out 52.6% of its earnings in the form of a dividend. Southern Missouri Bancorp pays out 18.3% 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. Southern Missouri Bancorp has raised its dividend for 13 consecutive years.

Valuation and Earnings

This table compares West Bancorporation and Southern Missouri Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Bancorporation	$198.50 million	1.90	$24.05 million	$1.90	11.72
Southern Missouri Bancorp	$305.35 million	2.19	$58.58 million	$5.46	10.95

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

Analyst Ratings

This is a breakdown of recent ratings for West Bancorporation and Southern Missouri Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Bancorporation	0	3	0	0	2.00
Southern Missouri Bancorp	0	3	1	0	2.25

West Bancorporation presently has a consensus price target of $24.00, suggesting a potential upside of 7.82%. Southern Missouri Bancorp has a consensus price target of $62.83, suggesting a potential upside of 5.07%. Given West Bancorporation’s higher possible upside, analysts clearly believe West Bancorporation is more favorable than Southern Missouri Bancorp.

Summary

Southern Missouri Bancorp beats West Bancorporation on 13 of the 17 factors compared between the two stocks.

About West Bancorporation

West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.

About Southern Missouri Bancorp

Southern Missouri Bancorp, Inc. operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. The company offers deposits products, including interest-bearing and noninterest-bearing transaction accounts, saving accounts, certificates of deposit, retirement savings plans, and money market deposit accounts. It also provides loans, such as residential mortgage, commercial real estate, construction, and commercial business loans; and consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, the company offers fiduciary and investment management services; commercial and consumer insurance; online and mobile banking services; and debit or credit cards. The company was founded in 1887 and is headquartered in Poplar Bluff, Missouri.