Head to Head Analysis: Community Trust Bancorp (NASDAQ:CTBI) and Simmons First National (NASDAQ:SFNC)

Community Trust Bancorp (NASDAQ:CTBI) and Simmons First National (NASDAQ:SFNC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

Risk and Volatility

Community Trust Bancorp has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Simmons First National has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.

Insider and Institutional Ownership

60.2% of Community Trust Bancorp shares are owned by institutional investors. Comparatively, 27.6% of Simmons First National shares are owned by institutional investors. 4.3% of Community Trust Bancorp shares are owned by insiders. Comparatively, 1.4% of Simmons First National shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Community Trust Bancorp and Simmons First National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community Trust Bancorp	23.95%	11.96%	1.51%
Simmons First National	-27.83%	6.73%	0.91%

Valuation & Earnings

This table compares Community Trust Bancorp and Simmons First National”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Trust Bancorp	$409.34 million	2.61	$98.06 million	$5.43	10.84
Simmons First National	$1.43 billion	1.94	-$397.55 million	($2.77)	-6.90

Community Trust Bancorp has higher earnings, but lower revenue than Simmons First National. Simmons First National is trading at a lower price-to-earnings ratio than Community Trust Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

Community Trust Bancorp pays an annual dividend of $2.12 per share and has a dividend yield of 3.6%. Simmons First National pays an annual dividend of $0.85 per share and has a dividend yield of 4.4%. Community Trust Bancorp pays out 39.0% of its earnings in the form of a dividend. Simmons First National pays out -30.7% 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. Community Trust Bancorp has increased its dividend for 44 consecutive years and Simmons First National has increased its dividend for 14 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Community Trust Bancorp and Simmons First National, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Trust Bancorp	0	0	3	0	3.00
Simmons First National	1	3	2	3	2.78

Community Trust Bancorp presently has a consensus target price of $63.50, indicating a potential upside of 7.85%. Simmons First National has a consensus target price of $22.43, indicating a potential upside of 17.37%. Given Simmons First National’s higher probable upside, analysts clearly believe Simmons First National is more favorable than Community Trust Bancorp.

Summary

Community Trust Bancorp beats Simmons First National on 12 of the 18 factors compared between the two stocks.

About Community Trust Bancorp

Community Trust Bancorp, Inc. operates as the bank holding company for Community Trust Bank, Inc. that engages in the provision of commercial and personal banking, and trust and wealth management services to small and mid-sized communities in eastern, northeastern, central, and south-central Kentucky, as well as southern West Virginia, and northeastern Tennessee. The company accepts time and demand deposits, checking accounts, savings accounts and savings certificates, individual retirement accounts and Keogh plans, and money market accounts. Its loan portfolio includes commercial, construction, mortgage, and personal loans; lease-financing, lines of credit, revolving lines of credit, and term loans, as well as other specialized loans, including asset-based financing; residential and commercial real estate loans; and consumer loans. The company also provides cash management, renting safe deposit boxes, and funds transfer services; issues letters of credit; and acts as a trustee of personal trusts, executor of estates, trustee for employee benefit trusts, and paying agent for bond and stock issues, as well as an investment agent and depositor for securities. In addition, it offers securities brokerage services; debit cards; annuity and life insurance products; and repurchase agreements, as well as mobile, internet banking, and e-statement services. The company was founded in 1903 and is headquartered in Pikeville, Kentucky.

About Simmons First National

Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.