Meta Financial Group (NASDAQ:CASH) and Simmons First National (NASDAQ:SFNC) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Meta Financial Group and Simmons First National’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meta Financial Group 22.05% 12.64% 1.72%
Simmons First National 25.09% 10.86% 1.52%

Risk and Volatility

Meta Financial Group has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Simmons First National has a beta of 0.97, indicating that its share price is 3% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Meta Financial Group and Simmons First National, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meta Financial Group 0 1 2 1 3.00
Simmons First National 0 2 3 0 2.60

Meta Financial Group currently has a consensus price target of $25.75, suggesting a potential upside of 45.32%. Simmons First National has a consensus price target of $27.20, suggesting a potential upside of 68.11%. Given Simmons First National’s higher probable upside, analysts clearly believe Simmons First National is more favorable than Meta Financial Group.

Dividends

Meta Financial Group pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. Simmons First National pays an annual dividend of $0.68 per share and has a dividend yield of 4.2%. Meta Financial Group pays out 7.5% of its earnings in the form of a dividend. Simmons First National pays out 24.9% 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. Meta Financial Group has increased its dividend for 2 consecutive years and Simmons First National has increased its dividend for 8 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

77.7% of Meta Financial Group shares are owned by institutional investors. Comparatively, 27.3% of Simmons First National shares are owned by institutional investors. 4.7% of Meta Financial Group shares are owned by company insiders. Comparatively, 1.6% of Simmons First National shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Meta Financial Group and Simmons First National’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Meta Financial Group $548.27 million 1.12 $97.00 million $2.66 6.66
Simmons First National $988.15 million 1.78 $238.17 million $2.73 5.93

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

Summary

Simmons First National beats Meta Financial Group on 10 of the 18 factors compared between the two stocks.

Meta Financial Group Company Profile

Meta Financial Group, Inc. operates as the holding company for MetaBank that offers various banking products and services in the United States. The company accepts various deposit products, including statement savings accounts, money market savings accounts, negotiable order of withdrawal accounts, and checking accounts; and deposits related to prepaid cards, which primarily comprise checking accounts and certificate accounts. It also provides loans, such as commercial finance loans, commercial and multi-family real estate loans, one-to-four family mortgage loans, consumer finance loans, taxpayer advance loans, agriculture loans, consumer and commercial operating loans, and commercial insurance premium finance products. In addition, the company issues prepaid cards and consumer credit products; sponsors automated teller machines into various debit networks; and offers tax refund transfer and other payment industry products and services. It operates 10 full-service branch offices in Storm Lake and Des Moines, Iowa; and Brookings and Sioux Falls, South Dakota, as well as 17 non-branch offices located in South Dakota, Texas, California, Kentucky, Pennsylvania, Florida, Louisiana, Tennessee, Michigan, and Canada. The company was founded in 1954 and is headquartered in Sioux Falls, South Dakota.

Simmons First National Company Profile

Simmons First National Corporation operates as the holding company for Simmons Bank that provides financial products and services to individuals and businesses. It offers checking, savings, and time deposits; loan products, including consumer, real estate, commercial, agricultural, equipment, and SBA lending; personal and corporate trust services; credit cards; investment management products; insurance products; and securities and investment services. The company conducts banking operations through approximately 191 financial centers located in communities throughout Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee, and Texas. Simmons First National Corporation was founded in 1903 and is headquartered in Pine Bluff, Arkansas.

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