Financial Analysis: Truxton (OTCMKTS:TRUX) vs. Texas Community Bancshares (NASDAQ:TCBS)

Truxton (OTCMKTS:TRUX) and Texas Community Bancshares (NASDAQ:TCBS) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Risk & Volatility

Truxton has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, Texas Community Bancshares has a beta of -0.02, indicating that its stock price is 102% less volatile than the S&P 500.

Insider and Institutional Ownership

0.3% of Truxton shares are owned by institutional investors. Comparatively, 15.8% of Texas Community Bancshares shares are owned by institutional investors. 15.3% of Texas Community Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Truxton pays an annual dividend of $3.52 per share and has a dividend yield of 3.7%. Texas Community Bancshares pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Truxton pays out 43.8% of its earnings in the form of a dividend. Texas Community Bancshares pays out 22.0% 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. Texas Community Bancshares has increased its dividend for 1 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Truxton and Texas Community Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Truxton	0	0	0	0	0.00
Texas Community Bancshares	0	1	0	0	2.00

Profitability

This table compares Truxton and Texas Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Truxton	24.00%	N/A	N/A
Texas Community Bancshares	11.79%	5.66%	0.70%

Valuation and Earnings

This table compares Truxton and Texas Community Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Truxton	$92.29 million	3.00	$21.48 million	$8.04	11.93
Texas Community Bancshares	$25.57 million	1.94	$2.84 million	$1.09	15.76

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

Summary

Texas Community Bancshares beats Truxton on 8 of the 15 factors compared between the two stocks.

About Truxton

Truxton Corporation, through its subsidiaries, provides various banking, investment management, and trust administration services to individuals, businesses, and charitable institutions in the United States. The company offers deposit products, including demand, money market accounts, and certificates of deposit. It also provides lending products, such as residential and commercial real estate mortgages, commercial loans, construction and land development loans, commercial and industrial loans, operating lines of credit, and loans to individual. In addition, the company offers strategic and capital advisory services, business banking, and treasury management services; and insurance products. The company was formerly known as NBT Holdings Inc. and changed its name to Truxton Corporation in May 2013. Truxton Corporation was founded in 2004 and is based in Nashville, Tennessee.

About Texas Community Bancshares

Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.