Surrey Bancorp (OTCMKTS:SRYB) and CapStar Financial (NASDAQ:CSTR) Financial Survey

Surrey Bancorp (OTCMKTS:SRYB) and CapStar Financial (NASDAQ:CSTR) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Surrey Bancorp and CapStar Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Surrey Bancorp	0	0	0	0	N/A
CapStar Financial	0	1	0	0	2.00

CapStar Financial has a consensus price target of $15.58, indicating a potential downside of 22.47%. Given CapStar Financial’s higher probable upside, analysts clearly believe CapStar Financial is more favorable than Surrey Bancorp.

Profitability

This table compares Surrey Bancorp and CapStar Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Surrey Bancorp	37.97%	N/A	N/A
CapStar Financial	16.17%	8.46%	0.93%

Dividends

Surrey Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. CapStar Financial pays an annual dividend of $0.44 per share and has a dividend yield of 2.2%. Surrey Bancorp pays out 31.6% of its earnings in the form of a dividend. CapStar Financial pays out 28.0% 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. CapStar Financial has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Surrey Bancorp and CapStar Financial’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Surrey Bancorp	$16.20 million	4.23	$5.10 million	$1.52	10.99
CapStar Financial	$184.34 million	2.27	$29.80 million	$1.57	12.80

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

Insider & Institutional Ownership

3.7% of Surrey Bancorp shares are owned by institutional investors. Comparatively, 52.2% of CapStar Financial shares are owned by institutional investors. 33.7% of Surrey Bancorp shares are owned by company insiders. Comparatively, 9.2% of CapStar Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Surrey Bancorp has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, CapStar Financial has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Summary

CapStar Financial beats Surrey Bancorp on 11 of the 15 factors compared between the two stocks.

About Surrey Bancorp

Surrey BanCorp engages in the provision of banking solutions through its subsidiaries, Surrey Bank & Trust . It offers checking accounts, savings, deposit services, mortgages, real estate loans, commercial credit products, business checking, and electronic banking. The company was founded on May 1, 2003 and is headquartered in Mount Airy, NC.

About CapStar Financial

CapStar Financial Holdings, Inc. operates as the bank holding company for CapStar Bank that provides banking and other financial services to individuals and corporate customers in Tennessee, the United States. It offers noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, and time deposits; mortgage banking products; and wealth management and treasury management services. The company also provides commercial and residential real estate, construction and land development, commercial and industrial, consumer, non-owner-occupied real estate, home equity, paycheck protection program (PPP), and other loans, as well as business term loans, equipment financing, and lines of credit to small and medium sized businesses. In addition, it offers mobile banking services; and debit and credit cards. CapStar Financial Holdings, Inc. was founded in 2007 and is headquartered in Nashville, Tennessee.