Reviewing National Bankshares (NASDAQ:NKSH) and Stock Yards Bancorp (NASDAQ:SYBT)

Stock Yards Bancorp (NASDAQ:SYBT) and National Bankshares (NASDAQ:NKSH) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Dividends

Stock Yards Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 1.8%. National Bankshares pays an annual dividend of $1.56 per share and has a dividend yield of 4.4%. Stock Yards Bancorp pays out 26.3% of its earnings in the form of a dividend. National Bankshares pays out 56.7% 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. Stock Yards Bancorp has increased its dividend for 15 consecutive years.

Profitability

This table compares Stock Yards Bancorp and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stock Yards Bancorp	25.06%	13.58%	1.53%
National Bankshares	20.39%	10.38%	1.03%

Valuation & Earnings

This table compares Stock Yards Bancorp and National Bankshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stock Yards Bancorp	$564.54 million	3.71	$140.15 million	$4.86	14.60
National Bankshares	$85.32 million	2.62	$15.83 million	$2.75	12.77

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

Institutional and Insider Ownership

56.5% of Stock Yards Bancorp shares are held by institutional investors. Comparatively, 29.7% of National Bankshares shares are held by institutional investors. 2.9% of Stock Yards Bancorp shares are held by company insiders. Comparatively, 3.3% of National Bankshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Stock Yards Bancorp has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Stock Yards Bancorp and National Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stock Yards Bancorp	0	4	2	0	2.33
National Bankshares	0	1	0	1	3.00

Stock Yards Bancorp presently has a consensus price target of $76.00, indicating a potential upside of 7.12%. Given Stock Yards Bancorp’s higher possible upside, research analysts clearly believe Stock Yards Bancorp is more favorable than National Bankshares.

Summary

Stock Yards Bancorp beats National Bankshares on 14 of the 18 factors compared between the two stocks.

About Stock Yards Bancorp

Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.