Third Coast Bancshares (NASDAQ:TCBX) & City (NASDAQ:CHCO) Critical Contrast

City (NASDAQ:CHCO) and Third Coast Bancshares (NASDAQ:TCBX) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, earnings and valuation.

Valuation & Earnings

This table compares City and Third Coast Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
City	$398.98 million	4.74	$130.49 million	$9.08	14.76
Third Coast Bancshares	$219.24 million	3.09	$47.67 million	$3.89	10.51

City has higher revenue and earnings than Third Coast Bancshares. Third Coast Bancshares is trading at a lower price-to-earnings ratio than City, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

City has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Third Coast Bancshares has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Dividends

City pays an annual dividend of $3.48 per share and has a dividend yield of 2.6%. Third Coast Bancshares pays an annual dividend of $16.87 per share and has a dividend yield of 41.3%. City pays out 38.3% of its earnings in the form of a dividend. Third Coast Bancshares pays out 433.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. City has raised its dividend for 6 consecutive years.

Profitability

This table compares City and Third Coast Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
City	32.72%	16.58%	1.96%
Third Coast Bancshares	16.30%	12.05%	1.17%

Insider & Institutional Ownership

72.4% of City shares are owned by institutional investors. Comparatively, 36.9% of Third Coast Bancshares shares are owned by institutional investors. 1.8% of City shares are owned by insiders. Comparatively, 10.5% of Third Coast Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for City and Third Coast Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
City	0	5	1	0	2.17
Third Coast Bancshares	0	2	3	0	2.60

City currently has a consensus price target of $134.25, indicating a potential upside of 0.17%. Third Coast Bancshares has a consensus price target of $45.00, indicating a potential upside of 10.05%. Given Third Coast Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe Third Coast Bancshares is more favorable than City.

Summary

City beats Third Coast Bancshares on 12 of the 17 factors compared between the two stocks.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.

About Third Coast Bancshares

Third Coast Bancshares, Inc. operates as a bank holding company for Third Coast Bank, SSB that provides various commercial banking solutions to small and medium-sized businesses, and professionals. The company's deposit products include checking, savings, individual retirement, and money market accounts, as well as certificates of deposit. It also offers commercial and industrial loans, equipment loans, working capital lines of credit, guaranteed loans, auto finance, letters of credit, commercial and residential real estate, and construction, development, and other loans. In addition, the company provides retail and commercial online banking platforms, mobile banking apps, mortgage, treasury management solutions, merchant card services, and customer digital solutions, as well as debit and credit cards. Third Coast Bancshares, Inc. was founded in 2008 and is headquartered in Humble, Texas.