Contrasting ServisFirst Bancshares (NYSE:SFBS) and Sumitomo Mitsui Trust (OTCMKTS:SUTNY)

Sumitomo Mitsui Trust (OTCMKTS:SUTNY) and ServisFirst Bancshares (NYSE:SFBS) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, analyst recommendations, earnings and profitability.

Analyst Ratings

This is a summary of recent ratings for Sumitomo Mitsui Trust and ServisFirst Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sumitomo Mitsui Trust	0	1	0	0	2.00
ServisFirst Bancshares	1	0	4	0	2.60

ServisFirst Bancshares has a consensus target price of $46.50, suggesting a potential upside of 9.73%. Given ServisFirst Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe ServisFirst Bancshares is more favorable than Sumitomo Mitsui Trust.

Profitability

This table compares Sumitomo Mitsui Trust and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sumitomo Mitsui Trust	11.81%	10.45%	0.45%
ServisFirst Bancshares	32.53%	17.66%	1.89%

Institutional and Insider Ownership

67.3% of ServisFirst Bancshares shares are owned by institutional investors. 6.5% of ServisFirst Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Sumitomo Mitsui Trust and ServisFirst Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sumitomo Mitsui Trust	$19.82 billion	1.47	$1.99 billion	$0.43	12.27
ServisFirst Bancshares	$1.02 billion	4.55	$276.60 million	$3.13	13.54

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

Dividends

Sumitomo Mitsui Trust pays an annual dividend of $0.10 per share and has a dividend yield of 1.9%. ServisFirst Bancshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.8%. Sumitomo Mitsui Trust pays out 23.3% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 24.3% 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. ServisFirst Bancshares has raised its dividend for 10 consecutive years. Sumitomo Mitsui Trust is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

ServisFirst Bancshares beats Sumitomo Mitsui Trust on 12 of the 16 factors compared between the two stocks.

About Sumitomo Mitsui Trust

Sumitomo Mitsui Trust Holdings, Inc. operates as a trust bank in Japan and internationally. It offers supervising services for management strategies, and financial and human resource management; and general affairs, business process, corporate administration, operational process, risk, and compliance management services; and internal auditing services. The company also provides real estate brokerage, investment management, and investment advisory services for individual and corporate clients; high-level professional consulting services; loan guarantees and payment collection agency services; issuing credit cards; internet banking; securities administration and credit card services; and advanced financial instruments, such as leasing and credit services, and credit card financing services, as well as mortgage loans and managing private equity funds and related advisory services. In addition, it offers back-office services, such as business management and system administration for stock transfer agencies; clerical works, including managing shareholders registry and special accounts; custody and fund administration services; stock transfer agency services; asset management services; and retail total solution, marketing, and fiduciary services, as well as system development and maintenance. Further, the company provides facilities management, clerical work outsourcing, and leasing of buildings; consulting services related to digital transformation, data-analytics, and a range of research and studies; and evaluation of mutual funds, discretionary investment funds, and insurance products, as well as engages in trustee and temporary staffing businesses. The company was formerly known as Chuo Mitsui Trust Holdings, Inc. and changed its name to Sumitomo Mitsui Trust Holdings, Inc. in 2011. Sumitomo Mitsui Trust Holdings, Inc. was founded in 1924 and is headquartered in Tokyo, Japan.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.