Analyzing National Bank (NYSE:NBHC) and Bank7 (NASDAQ:BSVN)

National Bank (NYSE:NBHC) and Bank7 (NASDAQ:BSVN) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.

Dividends

National Bank pays an annual dividend of $1.28 per share and has a dividend yield of 3.0%. Bank7 pays an annual dividend of $1.08 per share and has a dividend yield of 2.4%. National Bank pays out 47.8% of its earnings in the form of a dividend. Bank7 pays out 23.2% 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. National Bank has raised its dividend for 10 consecutive years and Bank7 has raised its dividend for 5 consecutive years. National Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares National Bank and Bank7″s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bank	$587.34 million	3.28	$109.57 million	$2.68	16.03
Bank7	$137.26 million	3.18	$43.07 million	$4.66	9.84

National Bank has higher revenue and earnings than Bank7. Bank7 is trading at a lower price-to-earnings ratio than National Bank, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares National Bank and Bank7’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bank	17.14%	8.72%	1.18%
Bank7	31.77%	18.18%	2.34%

Institutional and Insider Ownership

92.7% of National Bank shares are owned by institutional investors. Comparatively, 23.5% of Bank7 shares are owned by institutional investors. 6.8% of National Bank shares are owned by insiders. Comparatively, 25.7% of Bank7 shares are owned by 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.

Analyst Ratings

This is a breakdown of recent ratings for National Bank and Bank7, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bank	0	2	5	0	2.71
Bank7	0	0	3	1	3.25

National Bank presently has a consensus price target of $46.20, suggesting a potential upside of 7.54%. Bank7 has a consensus price target of $54.50, suggesting a potential upside of 18.81%. Given Bank7’s stronger consensus rating and higher possible upside, analysts clearly believe Bank7 is more favorable than National Bank.

Volatility & Risk

National Bank has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Bank7 has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.

Summary

Bank7 beats National Bank on 10 of the 18 factors compared between the two stocks.

About National Bank

National Bank Holdings Corporation operates as the bank holding company for NBH Bank that provides various banking products and financial services to commercial, business, and consumer clients in the United States. It offers deposit products, including checking, savings, money market, and other deposit accounts, including fixed-rate and fixed maturity time deposits. The company also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, food and agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases; non-owner occupied commercial real estate loans consisting of loans on commercial properties, such as office buildings, warehouse/distribution buildings, multi-family, hospitality, and retail buildings; small business administration loans to support small businesses and entrepreneurs; term loans, line of credits, and real estate secured loans; residential real estate loans; and consumer loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. The company operates through a network of banking centers located in Colorado, the greater Kansas City region, New Mexico, Utah, Wyoming, Idaho, and Texas. It also operates ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. The company was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.

About Bank7

Bank7 Corp. operates as a bank holding company for Bank7 that provides banking and financial services to individual and corporate customers. It offers commercial deposit, commercial checking, money market, and other deposit accounts; and retail deposit services, such as certificates of deposit, money market accounts, checking accounts, negotiable order of withdrawal accounts, savings accounts, and automated teller machine access. The company also provides commercial real estate, hospitality, energy, and commercial and industrial lending services; consumer lending services to individuals for personal and household purposes comprising residential real estate loans and mortgage banking services, personal lines of credit, loans for the purchase of automobiles, and other installment loans, as well as secured and unsecured term loans and home improvement loans. It operates through a network of full-service branches in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area, and Kansas. The company was formerly known as Haines Financial Corp. Bank7 Corp. was founded in 1901 and is headquartered in Oklahoma City, Oklahoma.