Xenith Bankshares (NASDAQ: XBKS) and BancorpSouth (NYSE:BXS) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Profitability

This table compares Xenith Bankshares and BancorpSouth’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Xenith Bankshares 50.54% 14.07% 2.04%
BancorpSouth 19.46% 8.77% 1.02%

Earnings and Valuation

This table compares Xenith Bankshares and BancorpSouth’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Xenith Bankshares N/A N/A N/A $3.03 9.44
BancorpSouth $743.84 million 3.55 $147.47 million $1.62 17.90

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

Analyst Ratings

This is a summary of recent ratings for Xenith Bankshares and BancorpSouth, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Xenith Bankshares 0 2 1 0 2.33
BancorpSouth 0 7 1 0 2.13

Xenith Bankshares presently has a consensus price target of $28.00, suggesting a potential downside of 2.13%. BancorpSouth has a consensus price target of $31.20, suggesting a potential upside of 7.59%. Given BancorpSouth’s higher probable upside, analysts clearly believe BancorpSouth is more favorable than Xenith Bankshares.

Insider & Institutional Ownership

59.9% of Xenith Bankshares shares are held by institutional investors. Comparatively, 65.5% of BancorpSouth shares are held by institutional investors. 31.7% of Xenith Bankshares shares are held by insiders. Comparatively, 2.6% of BancorpSouth shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Xenith Bankshares has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.Comparatively, BancorpSouth has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500.

Dividends

BancorpSouth pays an annual dividend of $0.50 per share and has a dividend yield of 1.7%. Xenith Bankshares does not pay a dividend. BancorpSouth pays out 30.9% of its earnings in the form of a dividend. Xenith Bankshares has increased its dividend for 4 consecutive years.

Summary

Xenith Bankshares beats BancorpSouth on 8 of the 14 factors compared between the two stocks.

About Xenith Bankshares

Xenith Bankshares, Inc., formerly Hampton Roads Bankshares, Inc., is a bank holding company for Xenith Bank. Xenith Bank is a commercial bank specifically targeting the banking needs of middle market and small businesses, local real estate developers and investors, and retail banking clients. Xenith Bank’s regional area of operations spans from Baltimore, Maryland, to Raleigh and eastern North Carolina, complementing its presence in greater Washington, D.C., greater Richmond, Virginia, and greater Hampton Roads, Virginia. Its service and products consist primarily of taking deposits from, and making loans to, its target customers within its target markets. It offers other banking related specialized products and services to its customers, such as travelers’ checks, coin counters, wire services, online banking and safe deposit box services. Additionally, it offers commercial customers various cash management products, including remote deposit.

About BancorpSouth

BancorpSouth, Inc. is a financial holding company. The Company, through its principal bank subsidiary, BancorpSouth Bank (the Bank), conducts commercial banking and financial services operations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, Tennessee, Texas and Illinois. The Company’s segments include Community Banking, Insurance Agencies, and General Corporate and Other. Its Community Banking segment provides a range of deposit products, commercial loans and consumer loans. Its Insurance Agencies segment serves as agents in the sale of commercial lines of insurance and full lines of property and casualty, life, health and employee benefits products and services. Its General Corporate and Other segment includes mortgage banking, trust services, credit card activities, investment services and other activities not allocated to the Community Banking or Insurance Agencies segments.

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