Reviewing Investar (NASDAQ:ISTR) & Third Coast Bancshares (NASDAQ:TCBX)

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

Analyst Ratings

This is a summary of current recommendations for Third Coast Bancshares and Investar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Third Coast Bancshares	0	2	2	1	2.80
Investar	0	0	2	1	3.33

Third Coast Bancshares currently has a consensus target price of $45.50, suggesting a potential upside of 21.74%. Investar has a consensus target price of $29.00, suggesting a potential upside of 9.02%. Given Third Coast Bancshares’ higher possible upside, equities analysts plainly believe Third Coast Bancshares is more favorable than Investar.

Earnings & Valuation

This table compares Third Coast Bancshares and Investar”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Third Coast Bancshares	$207.74 million	2.97	$47.67 million	$3.79	9.86
Investar	$153.48 million	1.70	$22.90 million	$2.14	12.43

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Third Coast Bancshares	16.30%	12.05%	1.17%
Investar	14.92%	9.31%	0.87%

Risk and Volatility

Third Coast Bancshares has a beta of 0.38, indicating that its stock price is 62% less volatile than the S&P 500. Comparatively, Investar has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Institutional and Insider Ownership

36.9% of Third Coast Bancshares shares are held by institutional investors. Comparatively, 50.2% of Investar shares are held by institutional investors. 10.3% of Third Coast Bancshares shares are held by insiders. Comparatively, 8.8% of Investar shares are held by 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.

Dividends

Third Coast Bancshares pays an annual dividend of $16.87 per share and has a dividend yield of 45.1%. Investar pays an annual dividend of $0.44 per share and has a dividend yield of 1.7%. Third Coast Bancshares pays out 445.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Investar pays out 20.6% of its earnings in the form of a dividend. Investar has raised its dividend for 10 consecutive years.

Summary

Third Coast Bancshares beats Investar on 10 of the 16 factors compared between the two stocks.

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.

About Investar

Investar Holding Corporation operates as the bank holding company for Investar Bank that provides a range of commercial banking products to individuals, professionals, and small to medium-sized businesses in south Louisiana, southeast Texas, and Alabama in the United States. The company offers various deposit products and services, such as savings, checking, money market, and individual retirement accounts, as well as various certificates of deposit; debit and credit cards; internet, mobile, and video banking services; and reciprocal deposit products. It also provides commercial real estate loans; commercial and industrial loans, including working capital lines of credit and equipment loans; loans for the construction of commercial projects, and single family residential and multifamily properties; one-to-four family residential real estate loans, such as second mortgage loans; and consumer loans, such as secured and unsecured installment and term loans, home equity loans and lines of credit, and auto loans, as well as loans for personal, family, and household purposes. In addition, the company offers treasury management products, including remote deposit capture, lockbox payment processing, virtual vault, positive pay, ACH origination, wire transfer, investment sweep accounts, and business internet banking services. Further, it provides various other banking services, such as cashiers' checks, direct deposit of payroll and social security checks, night depository, bank-by-mail, automated teller machines, electronic statements, interactive teller machines, online account opening, and mobile wallet payment services. Investar Holding Corporation was founded in 2006 and is headquartered in Baton Rouge, Louisiana.