Head-To-Head Survey: South Plains Financial (NASDAQ:SPFI) & Simmons First National (NASDAQ:SFNC)

Simmons First National (NASDAQ:SFNC) and South Plains Financial (NASDAQ:SPFI) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Insider & Institutional Ownership

27.6% of Simmons First National shares are owned by institutional investors. Comparatively, 54.9% of South Plains Financial shares are owned by institutional investors. 0.8% of Simmons First National shares are owned by company insiders. Comparatively, 24.3% of South Plains Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Simmons First National and South Plains Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simmons First National	0	5	2	2	2.67
South Plains Financial	0	1	6	0	2.86

Simmons First National presently has a consensus target price of $24.50, suggesting a potential upside of 6.48%. South Plains Financial has a consensus target price of $49.60, suggesting a potential upside of 12.09%. Given South Plains Financial’s stronger consensus rating and higher probable upside, analysts plainly believe South Plains Financial is more favorable than Simmons First National.

Dividends

Simmons First National pays an annual dividend of $0.86 per share and has a dividend yield of 3.7%. South Plains Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.5%. Simmons First National pays out -34.0% of its earnings in the form of a dividend. South Plains Financial pays out 18.5% 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. Simmons First National has increased its dividend for 14 consecutive years and South Plains Financial has increased its dividend for 5 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Simmons First National	-24.64%	8.32%	1.16%
South Plains Financial	20.79%	13.23%	1.44%

Volatility and Risk

Simmons First National has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, South Plains Financial has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500.

Earnings and Valuation

This table compares Simmons First National and South Plains Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simmons First National	$1.43 billion	2.34	-$397.55 million	($2.53)	-9.09
South Plains Financial	$296.89 million	2.85	$58.47 million	$3.67	12.06

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

Summary

South Plains Financial beats Simmons First National on 12 of the 18 factors compared between the two stocks.

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.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.