Southside Bancshares (NASDAQ:SBSI) versus Isabella Bank (OTCMKTS:ISBA) Head to Head Comparison

Southside Bancshares (NASDAQ:SBSI) and Isabella Bank (OTCMKTS:ISBA) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, risk and valuation.

Dividends

Southside Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 4.4%. Isabella Bank pays an annual dividend of $1.12 per share and has a dividend yield of 2.1%. Southside Bancshares pays out 62.9% of its earnings in the form of a dividend. Isabella Bank pays out 43.8% 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. Southside Bancshares has raised its dividend for 30 consecutive years. Southside Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

55.7% of Southside Bancshares shares are owned by institutional investors. 6.0% of Southside Bancshares shares are owned by insiders. Comparatively, 9.7% of Isabella Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Southside Bancshares and Isabella Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southside Bancshares	0	3	0	0	2.00
Isabella Bank	0	1	0	0	2.00

Southside Bancshares presently has a consensus target price of $35.00, indicating a potential upside of 6.43%. Isabella Bank has a consensus target price of $34.00, indicating a potential downside of 35.18%. Given Southside Bancshares’ higher possible upside, analysts plainly believe Southside Bancshares is more favorable than Isabella Bank.

Risk and Volatility

Southside Bancshares has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500. Comparatively, Isabella Bank has a beta of 0.09, meaning that its stock price is 91% less volatile than the S&P 500.

Profitability

This table compares Southside Bancshares and Isabella Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southside Bancshares	19.40%	11.10%	1.06%
Isabella Bank	13.28%	7.34%	0.73%

Earnings & Valuation

This table compares Southside Bancshares and Isabella Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southside Bancshares	$235.49 million	4.20	$88.49 million	$2.29	14.36
Isabella Bank	$76.30 million	5.04	$13.89 million	$2.56	20.49

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

Summary

Southside Bancshares beats Isabella Bank on 10 of the 15 factors compared between the two stocks.

About Southside Bancshares

Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposits. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration of irrevocable, revocable, and testamentary trusts, estate administration, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. In addition, the company provides retirement and employee benefit accounts, including plans and profit sharing plans; and telephone, internet, and mobile banking services. The company offers various banking services through branches, drive-thru facilities, automated teller machines, and interactive teller machines. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.

About Isabella Bank

Isabella Bank Corporation operates as the bank holding company for Isabella Bank that provides various banking products and services to businesses, institutions, and individuals and their families. Its deposit products include checking accounts, savings accounts, certificates of deposit, direct deposits, and money market accounts. The company's loan portfolio comprises commercial, agricultural, and residential real estate loans, as well as consumer loans, including secured and unsecured personal loans. It also offers cash management, mobile and internet banking, electronic bill pay, automated teller machines, trust and investment, estate planning, and safe deposit box rental services; and insurance products. The company operated banking offices in Clare, Gratiot, Isabella, Mecosta, Midland, Montcalm, and Saginaw counties. Isabella Bank Corporation was founded in 1903 and is headquartered in Mount Pleasant, Michigan.