Peoples Bancorp (NASDAQ: PEBO) and Southside Bancshares (NASDAQ:SBSI) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, valuation, profitability, analyst recommendations, risk, dividends and earnings.

Dividends

Peoples Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.7%. Southside Bancshares pays an annual dividend of $1.12 per share and has a dividend yield of 3.2%. Peoples Bancorp pays out 43.6% of its earnings in the form of a dividend. Southside Bancshares pays out 58.7% 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. Peoples Bancorp has raised its dividend for 19 consecutive years.

Analyst Ratings

This is a summary of current ratings for Peoples Bancorp and Southside Bancshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Peoples Bancorp 0 3 0 0 2.00
Southside Bancshares 0 2 0 0 2.00

Peoples Bancorp presently has a consensus price target of $33.50, indicating a potential upside of 1.15%. Southside Bancshares has a consensus price target of $37.00, indicating a potential upside of 4.49%. Given Southside Bancshares’ higher possible upside, analysts plainly believe Southside Bancshares is more favorable than Peoples Bancorp.

Profitability

This table compares Peoples Bancorp and Southside Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Peoples Bancorp 21.10% 7.99% 1.02%
Southside Bancshares 25.70% 10.32% 1.00%

Earnings & Valuation

This table compares Peoples Bancorp and Southside Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Peoples Bancorp $157.17 million 3.85 $36.93 million $2.02 16.40
Southside Bancshares $170.55 million 6.09 $55.95 million $1.91 18.57

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

Risk & Volatility

Peoples Bancorp has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.

Institutional and Insider Ownership

62.6% of Peoples Bancorp shares are held by institutional investors. Comparatively, 51.3% of Southside Bancshares shares are held by institutional investors. 3.0% of Peoples Bancorp shares are held by company insiders. Comparatively, 17.2% of Southside Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Southside Bancshares beats Peoples Bancorp on 10 of the 15 factors compared between the two stocks.

About Peoples Bancorp

Peoples Bancorp Inc. is a financial holding company. The Company operates principally through its subsidiary, Peoples Bank. Peoples Bank’s operating subsidiaries include Peoples Insurance Agency, LLC (Peoples Insurance) and two asset management companies, PBNA, L.L.C. and Peoples Tax Credit Equity, LLC. Peoples Investment Company has one subsidiary, Peoples Capital Corporation. The Company offers banking, insurance, investment and trust solutions. Its products and services include various demand deposit accounts, savings accounts, money market accounts and certificates of deposit; commercial, consumer and real estate mortgage loans (both commercial and residential) and lines of credit; debit and automated teller machine (ATM) cards; credit cards for individuals and businesses; merchant credit card transaction processing services; corporate and personal trust services; a range of life, health and property and casualty insurance products, and brokerage services.

About Southside Bancshares

Southside Bancshares, Inc. (Southside) is a bank holding company for Southside Bank (the Bank). The Company is a community-focused financial institution that offers a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations in the communities. These services include consumer and commercial loans, deposit accounts, trust services, safe deposit services and brokerage services. As of December 31, 2016, the Company operated through 60 banking centers, 17 of which are located in grocery stores. The Company offers a range of deposit accounts with a range of interest rates and terms, including savings, money market, interest and non-interest bearing checking accounts and certificates of deposit (CDs).

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