Analyzing National Bankshares (NASDAQ:NKSH) and South Atlantic Bancshares (OTCMKTS:SABK)

National Bankshares (NASDAQ:NKSH) and South Atlantic Bancshares (OTCMKTS:SABK) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, valuation, risk, institutional ownership, analyst recommendations, earnings and profitability.

Profitability

This table compares National Bankshares and South Atlantic Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bankshares	15.56%	8.81%	0.80%
South Atlantic Bancshares	N/A	N/A	N/A

Dividends

National Bankshares pays an annual dividend of $1.56 per share and has a dividend yield of 5.3%. South Atlantic Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. National Bankshares pays out 76.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. South Atlantic Bancshares pays out 5.3% of its earnings in the form of a dividend.

Volatility and Risk

National Bankshares has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, South Atlantic Bancshares has a beta of 0.25, indicating that its share price is 75% less volatile than the S&P 500.

Valuation & Earnings

This table compares National Bankshares and South Atlantic Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bankshares	$52.54 million	3.56	$7.62 million	$2.04	14.40
South Atlantic Bancshares	$93.28 million	1.53	$14.21 million	$1.89	10.05

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

Analyst Ratings

This is a breakdown of recent ratings for National Bankshares and South Atlantic Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bankshares	0	1	0	0	2.00
South Atlantic Bancshares	0	0	1	1	3.50

South Atlantic Bancshares has a consensus price target of $19.00, suggesting a potential upside of 0.00%. Given South Atlantic Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe South Atlantic Bancshares is more favorable than National Bankshares.

Institutional & Insider Ownership

29.7% of National Bankshares shares are owned by institutional investors. Comparatively, 13.3% of South Atlantic Bancshares shares are owned by institutional investors. 3.2% of National Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

National Bankshares beats South Atlantic Bancshares on 10 of the 17 factors compared between the two stocks.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.

About South Atlantic Bancshares

South Atlantic Bancshares, Inc. operates as the bank holding company for South Atlantic Bank that provides consumer and commercial banking products and services to individuals, small businesses, and corporations in South Carolina. The company offers checking, money market, and saving accounts, as well as certificate of deposit, individual retirement, and health saving accounts; personal, auto, and recreation loans, as well as home equity and ready reserve overdraft line of credits, and commercial lending products; and credit cards. It also provides cash management and merchant card services; remote deposit capture and automated clearing house services; online, mobile, and telephone banking services; personal and business checks; mortgage products and services; and wealth management services. The company operates offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, and Beaufort, South Carolina. South Atlantic Bancshares, Inc. was founded in 2007 and is headquartered in Myrtle Beach, South Carolina.