Critical Analysis: Allegiance Bancshares (ABTX) vs. Sumitomo Mitsui Financial Group (SMFG)
Allegiance Bancshares (NASDAQ: ABTX) and Sumitomo Mitsui Financial Group (NYSE:SMFG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.
Sumitomo Mitsui Financial Group pays an annual dividend of $0.24 per share and has a dividend yield of 2.8%. Allegiance Bancshares does not pay a dividend. Sumitomo Mitsui Financial Group pays out 24.5% of its earnings in the form of a dividend.
Risk & Volatility
Allegiance Bancshares has a beta of 2.33, indicating that its stock price is 133% more volatile than the S&P 500. Comparatively, Sumitomo Mitsui Financial Group has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for Allegiance Bancshares and Sumitomo Mitsui Financial Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Sumitomo Mitsui Financial Group||0||0||0||0||N/A|
Allegiance Bancshares presently has a consensus price target of $43.00, indicating a potential upside of 9.00%. Given Allegiance Bancshares’ higher probable upside, equities research analysts plainly believe Allegiance Bancshares is more favorable than Sumitomo Mitsui Financial Group.
Valuation and Earnings
This table compares Allegiance Bancshares and Sumitomo Mitsui Financial Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Allegiance Bancshares||$108.05 million||4.81||$22.85 million||$1.51||26.13|
|Sumitomo Mitsui Financial Group||$47.48 billion||1.28||$5.91 billion||$0.98||8.81|
Sumitomo Mitsui Financial Group has higher revenue and earnings than Allegiance Bancshares. Sumitomo Mitsui Financial Group is trading at a lower price-to-earnings ratio than Allegiance Bancshares, indicating that it is currently the more affordable of the two stocks.
This table compares Allegiance Bancshares and Sumitomo Mitsui Financial Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sumitomo Mitsui Financial Group||14.02%||7.09%||0.41%|
Institutional and Insider Ownership
41.3% of Allegiance Bancshares shares are held by institutional investors. Comparatively, 2.5% of Sumitomo Mitsui Financial Group shares are held by institutional investors. 13.9% of Allegiance Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Allegiance Bancshares beats Sumitomo Mitsui Financial Group on 11 of the 15 factors compared between the two stocks.
Allegiance Bancshares Company Profile
Allegiance Bancshares, Inc. is a bank holding company. Through its subsidiary, Allegiance Bank (the Bank), the Company provides a range of commercial banking services primarily to Houston metropolitan area-based small to medium-sized businesses, professionals and individual customers. In addition to banking during normal business hours, the Company offers extended drive-in hours, automated teller machines (ATMs) and banking by telephone, mail and Internet. The Company also provides debit card services, cash management services and wire transfer services, and offers night depository, direct deposits, cashier’s checks, letters of credit and mobile deposits. It also offers safe deposit boxes, automated teller machines, drive-in services and round the clock depository facilities. The Company maintains an Internet banking Website that allows customers to obtain account balances and transfer funds among accounts.
Sumitomo Mitsui Financial Group Company Profile
Sumitomo Mitsui Financial Group, Inc. is a holding company for Sumitomo Mitsui Banking Corporation (the Bank) and its subsidiaries. The Company operates through four segments: Commercial Banking, Leasing, Securities and Consumer Finance. The Company and its subsidiaries offer a range of financial services, including commercial banking, leasing, securities, consumer finance and other services. The Company offers commercial banking services to a range of customers, including corporations, mid-sized companies, small-sized companies, individuals, governments and governmental entities mainly through the Bank. The Bank has equity interest in Sumitomo Mitsui Finance and Leasing Company, Limited, which provides a range of leasing services, including equipment lease, operating lease, leveraged lease and aircraft operating lease. The Bank’s subsidiary, SMBC Nikko Securities Inc., offers a range of financial products, and investment consultation and administrative services.
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