Peoples Bancorp (NASDAQ: PEBO) and Simmons First National Corporation (NASDAQ:SFNC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, analyst recommendations, profitabiliy, institutional ownership, risk, dividends and earnings.

Dividends

Peoples Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.8%. Simmons First National Corporation pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Peoples Bancorp pays out 47.6% of its earnings in the form of a dividend. Simmons First National Corporation pays out 33.0% 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.

Volatility & Risk

Peoples Bancorp has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Simmons First National Corporation has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Profitability

This table compares Peoples Bancorp and Simmons First National Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Peoples Bancorp 19.67% 7.63% 0.98%
Simmons First National Corporation 21.03% 8.71% 1.19%

Earnings & Valuation

This table compares Peoples Bancorp and Simmons First National Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Peoples Bancorp $157.17 million 3.55 $33.33 million $1.85 16.76
Simmons First National Corporation $406.42 million 4.11 $96.34 million $3.03 17.36

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Peoples Bancorp and Simmons First National Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Peoples Bancorp 0 3 0 0 2.00
Simmons First National Corporation 0 2 2 0 2.50

Peoples Bancorp currently has a consensus price target of $32.50, suggesting a potential upside of 4.80%. Simmons First National Corporation has a consensus price target of $62.33, suggesting a potential upside of 18.50%. Given Simmons First National Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Simmons First National Corporation is more favorable than Peoples Bancorp.

Insider and Institutional Ownership

61.0% of Peoples Bancorp shares are held by institutional investors. Comparatively, 56.6% of Simmons First National Corporation shares are held by institutional investors. 3.0% of Peoples Bancorp shares are held by insiders. Comparatively, 4.6% of Simmons First National Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Simmons First National Corporation beats Peoples Bancorp on 14 of the 16 factors compared between the two stocks.

About Peoples Bancorp

Peoples Bancorp Inc. is a financial holding company. The Company operates principally through its subsidiary, Peoples Bank. Peoples Bank’s operating subsidiaries include Peoples Insurance Agency, LLC (Peoples Insurance) and two asset management companies, PBNA, L.L.C. and Peoples Tax Credit Equity, LLC. Peoples Investment Company has one subsidiary, Peoples Capital Corporation. The Company offers banking, insurance, investment and trust solutions. Its products and services include various demand deposit accounts, savings accounts, money market accounts and certificates of deposit; commercial, consumer and real estate mortgage loans (both commercial and residential) and lines of credit; debit and automated teller machine (ATM) cards; credit cards for individuals and businesses; merchant credit card transaction processing services; corporate and personal trust services; a range of life, health and property and casualty insurance products, and brokerage services.

About Simmons First National Corporation

Simmons First National Corporation is a financial holding company. The Company, through its subsidiary bank, Simmons Bank, provides financial services to individuals and businesses throughout the market areas they serve. As of December 31, 2016, Simmons Bank conducted banking operations through 150 financial centers located in communities throughout Arkansas, Kansas, Missouri and Tennessee. Simmons Bank offers consumer, real estate and commercial loans, checking and savings deposits. Simmons Bank and its subsidiaries have also developed products and services, which include credit cards, trust and fiduciary services, investments, agricultural finance lending, equipment lending, insurance and small business administration lending. The securities within the portfolio are classified as either held-to-maturity, available-for-sale or trading. The Company offers deposits, including non-interest bearing transaction accounts; interest bearing transaction accounts, and time deposits.

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