Critical Analysis: Red River Bancshares (NASDAQ:RRBI) & BOK Financial (NASDAQ:BOKF)

BOK Financial (NASDAQ:BOKF) and Red River Bancshares (NASDAQ:RRBI) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current ratings and price targets for BOK Financial and Red River Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BOK Financial	0	7	4	0	2.36
Red River Bancshares	0	1	2	0	2.67

BOK Financial presently has a consensus target price of $128.50, suggesting a potential downside of 5.22%. Red River Bancshares has a consensus target price of $67.00, suggesting a potential downside of 16.12%. Given BOK Financial’s higher possible upside, analysts plainly believe BOK Financial is more favorable than Red River Bancshares.

Dividends

BOK Financial pays an annual dividend of $2.52 per share and has a dividend yield of 1.9%. Red River Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 0.8%. BOK Financial pays out 27.5% of its earnings in the form of a dividend. Red River Bancshares pays out 10.0% 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. BOK Financial has raised its dividend for 20 consecutive years and Red River Bancshares has raised its dividend for 3 consecutive years. BOK Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

34.4% of BOK Financial shares are owned by institutional investors. Comparatively, 27.6% of Red River Bancshares shares are owned by institutional investors. 56.9% of BOK Financial shares are owned by company insiders. Comparatively, 15.9% of Red River Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares BOK Financial and Red River Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BOK Financial	17.10%	9.37%	1.09%
Red River Bancshares	24.44%	12.14%	1.28%

Risk & Volatility

BOK Financial has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Red River Bancshares has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Earnings and Valuation

This table compares BOK Financial and Red River Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BOK Financial	$3.38 billion	2.54	$577.99 million	$9.16	14.80
Red River Bancshares	$157.67 million	3.33	$34.24 million	$6.03	13.25

BOK Financial has higher revenue and earnings than Red River Bancshares. Red River Bancshares is trading at a lower price-to-earnings ratio than BOK Financial, indicating that it is currently the more affordable of the two stocks.

Summary

BOK Financial beats Red River Bancshares on 11 of the 17 factors compared between the two stocks.

About BOK Financial

BOK Financial Corporation operates as the financial holding company for BOKF, NA that provides various financial products and services in Oklahoma, Texas, New Mexico, Northwest Arkansas, Colorado, Arizona, and Kansas/Missouri. It operates through three segments: Commercial Banking, Consumer Banking, and Wealth Management. The Commercial Banking segment offers lending, treasury, cash management, and customer commodity risk management products for small businesses, middle market, and larger commercial customers, as well as operates TransFund electronic funds transfer network. The Consumer Banking segment engages in the provision of retail lending and deposit services to small business customers through retail branch network; and mortgage loan origination and servicing activities. The Wealth Management segment offers fiduciary, private bank, insurance, and investment advisory services; and brokerage and trading services primarily related to providing liquidity to the mortgage markets through trading of U.S. government agency mortgage-backed securities and related derivative contracts, as well as underwrites state and municipal securities. The company also provides commercial loans, such as loans for working capital, facilities acquisition or expansion, purchases of equipment, and other needs of commercial customers; and service, healthcare, manufacturing, wholesale/retail, energy, and other sector loans. In addition, it offers commercial real estate loans for the construction of buildings or other improvements to real estate and property held by borrowers for investment purposes; residential mortgage and personal loans; and automated teller machine, call center, and Internet and mobile banking services. The company was founded in 1910 and is headquartered in Tulsa, Oklahoma.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.