Financial Analysis: Simmons First National (NASDAQ:SFNC) & Colony Bankcorp (NYSE:CBAN)

Colony Bankcorp (NYSE:CBAN) and Simmons First National (NASDAQ:SFNC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Profitability

This table compares Colony Bankcorp and Simmons First National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Colony Bankcorp	15.07%	10.53%	0.97%
Simmons First National	-29.70%	5.84%	0.78%

Earnings and Valuation

This table compares Colony Bankcorp and Simmons First National”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Colony Bankcorp	$176.62 million	1.84	$23.87 million	$1.59	11.75
Simmons First National	$1.46 billion	1.91	$152.69 million	($2.93)	-6.57

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

Insider and Institutional Ownership

50.4% of Colony Bankcorp shares are owned by institutional investors. Comparatively, 27.6% of Simmons First National shares are owned by institutional investors. 6.6% of Colony Bankcorp shares are owned by company insiders. Comparatively, 1.4% of Simmons First National shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Colony Bankcorp has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500. Comparatively, Simmons First National has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Colony Bankcorp and Simmons First National, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Colony Bankcorp	0	0	1	0	3.00
Simmons First National	1	3	2	2	2.63

Simmons First National has a consensus price target of $22.33, suggesting a potential upside of 16.08%. Given Simmons First National’s higher probable upside, analysts plainly believe Simmons First National is more favorable than Colony Bankcorp.

Dividends

Colony Bankcorp pays an annual dividend of $0.46 per share and has a dividend yield of 2.5%. Simmons First National pays an annual dividend of $0.85 per share and has a dividend yield of 4.4%. Colony Bankcorp pays out 28.9% of its earnings in the form of a dividend. Simmons First National pays out -29.0% 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. Simmons First National has raised its dividend for 14 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Simmons First National beats Colony Bankcorp on 10 of the 18 factors compared between the two stocks.

About Colony Bankcorp

Colony Bankcorp, Inc. operates as the bank holding company for Colony Bank that provides various banking products and services to commercial and consumer customers. The company offers various deposit products, including demand, savings, and time deposits. It also provides loans to small and medium-sized businesses; residential and commercial construction, and land development loans; commercial real estate loans; commercial loans; agri-business and production loans; residential mortgage loans; home equity loans; and consumer loans. In addition, the company offers internet banking services, electronic bill payment services, safe deposit box rentals, telephone banking, credit and debit card services, and remote depository products, as well as access to a network of ATMs. As of January 20, 2022, it operated 39 locations throughout Georgia. The company was founded in 1975 and is headquartered in Fitzgerald, Georgia.

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.