Analyzing Southern Missouri Bancorp (NASDAQ:SMBC) & NatWest Group (NYSE:NWG)

NatWest Group (NYSE:NWG) and Southern Missouri Bancorp (NASDAQ:SMBC) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Dividends

NatWest Group pays an annual dividend of $0.63 per share and has a dividend yield of 4.0%. Southern Missouri Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 1.5%. NatWest Group pays out 31.5% of its earnings in the form of a dividend. Southern Missouri Bancorp pays out 15.9% 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. Southern Missouri Bancorp has increased its dividend for 13 consecutive years.

Institutional and Insider Ownership

1.3% of NatWest Group shares are owned by institutional investors. Comparatively, 49.5% of Southern Missouri Bancorp shares are owned by institutional investors. 14.6% of Southern Missouri Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares NatWest Group and Southern Missouri Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NatWest Group	$38.91 billion	1.59	$7.69 billion	$2.00	7.81
Southern Missouri Bancorp	$316.78 million	2.45	$71.84 million	$6.78	10.39

NatWest Group has higher revenue and earnings than Southern Missouri Bancorp. NatWest Group is trading at a lower price-to-earnings ratio than Southern Missouri Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for NatWest Group and Southern Missouri Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NatWest Group	0	3	6	1	2.80
Southern Missouri Bancorp	0	5	1	1	2.43

Southern Missouri Bancorp has a consensus target price of $79.50, indicating a potential upside of 12.83%. Given Southern Missouri Bancorp’s higher probable upside, analysts clearly believe Southern Missouri Bancorp is more favorable than NatWest Group.

Risk & Volatility

NatWest Group has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, Southern Missouri Bancorp has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares NatWest Group and Southern Missouri Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NatWest Group	19.61%	13.75%	0.80%
Southern Missouri Bancorp	23.47%	13.02%	1.46%

Summary

Southern Missouri Bancorp beats NatWest Group on 10 of the 17 factors compared between the two stocks.

About NatWest Group

NatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Private Banking, and Commercial & Institutional segments. The Retail Banking segment offers a range of banking products and related financial services, such as current accounts, mortgages, personal unsecured lending, and personal deposits, as well as mobile and online banking services. The Private Banking segment provides private banking and wealth management products for high-net-worth individuals and their business interests. The Commercial & Institutional segment offers banking and financial solutions to large corporate organisations, multi-nationals, and financial institutions. The company was formerly known as The Royal Bank of Scotland Group plc and changed its name to NatWest Group plc in July 2020. NatWest Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.

About Southern Missouri Bancorp

Southern Missouri Bancorp, Inc. operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. The company offers deposits products, including interest-bearing and noninterest-bearing transaction accounts, saving accounts, certificates of deposit, retirement savings plans, and money market deposit accounts. It also provides loans, such as residential mortgage, commercial real estate, construction, and commercial business loans; and consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, the company offers fiduciary and investment management services; commercial and consumer insurance; online and mobile banking services; and debit or credit cards. The company was founded in 1887 and is headquartered in Poplar Bluff, Missouri.