Reviewing Bank OZK (NASDAQ:OZK) and Summit State Bank (NASDAQ:SSBI)

Summit State Bank (NASDAQ:SSBI) and Bank OZK (NASDAQ:OZK) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Volatility & Risk

Summit State Bank has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500. Comparatively, Bank OZK has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.

Profitability

This table compares Summit State Bank and Bank OZK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit State Bank	3.87%	N/A	N/A
Bank OZK	24.95%	11.87%	1.67%

Valuation & Earnings

This table compares Summit State Bank and Bank OZK”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Summit State Bank	$37.09 million	2.26	$6.80 million	$0.34	36.32
Bank OZK	$2.81 billion	1.91	$715.48 million	$6.05	7.91

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

Institutional & Insider Ownership

86.2% of Bank OZK shares are held by institutional investors. 6.7% of Bank OZK shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Summit State Bank pays an annual dividend of $0.16 per share and has a dividend yield of 1.3%. Bank OZK pays an annual dividend of $1.92 per share and has a dividend yield of 4.0%. Summit State Bank pays out 47.1% of its earnings in the form of a dividend. Bank OZK pays out 31.7% 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. Bank OZK has raised its dividend for 29 consecutive years. Bank OZK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Summit State Bank and Bank OZK, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit State Bank	0	1	0	0	2.00
Bank OZK	3	5	3	0	2.00

Bank OZK has a consensus target price of $56.88, suggesting a potential upside of 18.79%. Given Bank OZK’s higher possible upside, analysts clearly believe Bank OZK is more favorable than Summit State Bank.

Summary

Bank OZK beats Summit State Bank on 14 of the 16 factors compared between the two stocks.

About Summit State Bank

Summit State Bank engages in providing an array of financial services to small and medium-sized businesses, their owners and employees, entrepreneurs, high net worth families, foundations, estates, and individual consumers. It specializes in business services, personal accounts, nonprofit programs, and mobile banking ranging from lending, checking, merchant, eBanking, automated teller machines, equity loans, and others. The company was founded on December 20, 1982 and is headquartered in Santa Rosa, CA.

About Bank OZK

Bank OZK provides various retail and commercial banking services for individuals and businesses in the United States. The company offers deposit services, including non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time and reciprocal deposits. It also provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts, and retirement accounts, as well as corporate trust services, including trustee, paying agent and registered transfer agent services, and other related services. In addition, the company offers treasury management services comprising automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, commercial card, and other services, as well as zero balance and investment sweep accounts. Further, it provides real estate, consumer, small business, indirect recreational vehicle and marine, equipment, agricultural, commercial and industrial, government guaranteed, lines of credit, homebuilder, and affordable housing loans; lender and structured, business aviation, and subscription financing services; and mortgage and other lending products. Additionally, the company offers ATMs; telephone, online, and mobile banking services; credit and debit cards; safe deposit boxes; and other products and services. The company was formerly known as Bank of the Ozarks and changed its name to Bank OZK in July 2018. Bank OZK was founded in 1903 and is headquartered in Little Rock, Arkansas.