Southside Bancshares (NYSE:SBSI) and Ponce Financial Group (NASDAQ:PDLB) Critical Survey

Southside Bancshares (NYSE:SBSI) and Ponce Financial Group (NASDAQ:PDLB) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.

Earnings and Valuation

This table compares Southside Bancshares and Ponce Financial Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southside Bancshares	$419.03 million	2.20	$69.18 million	$2.54	12.17
Ponce Financial Group	$119.43 million	4.08	$28.70 million	$1.40	14.39

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

Institutional and Insider Ownership

55.7% of Southside Bancshares shares are held by institutional investors. Comparatively, 64.3% of Ponce Financial Group shares are held by institutional investors. 5.1% of Southside Bancshares shares are held by company insiders. Comparatively, 7.2% of Ponce Financial Group shares are held 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.

Profitability

This table compares Southside Bancshares and Ponce Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southside Bancshares	16.70%	11.16%	1.11%
Ponce Financial Group	16.51%	10.52%	1.02%

Risk and Volatility

Southside Bancshares has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Ponce Financial Group has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Southside Bancshares and Ponce Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southside Bancshares	0	6	0	0	2.00
Ponce Financial Group	0	1	0	2	3.33

Southside Bancshares currently has a consensus target price of $34.75, suggesting a potential upside of 12.38%. Ponce Financial Group has a consensus target price of $24.00, suggesting a potential upside of 19.11%. Given Ponce Financial Group’s stronger consensus rating and higher possible upside, analysts plainly believe Ponce Financial Group is more favorable than Southside Bancshares.

Summary

Ponce Financial Group beats Southside Bancshares on 8 of the 14 factors compared between the two stocks.

About Southside Bancshares

Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposit. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration, revocable and testamentary trusts, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. As of December 31, 2021, the company operated through 56 banking facilities and 73 ATMs/ITMs. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.

About Ponce Financial Group

Ponce Financial Group, Inc. operates as the bank holding company for Ponce Bank that provides various banking products and services. It offers various deposit products, including demand accounts, NOW/IOLA, money market, reciprocal deposits, savings accounts, and certificates of deposit to individuals, business entities, and non-profit organizations, as well as individual retirement accounts. The company also provides real estate-secured loans, which includes one-to-four family investor-owned and owner-occupied residential; multifamily residential; nonresidential property; construction and land; commercial and industrial; and business and consumer loans, as well as lines of credit. In addition, it invests in securities, which consist of U.S. Government and federal agency securities and securities issued by government-sponsored or owned enterprises, as well as corporate securities, mortgage-backed securities, and Federal Home Loan Bank stock. Ponce Financial Group, Inc. was founded in 1960 and is headquartered in Bronx, New York.