Auburn National Bancorporation (NASDAQ:AUBN) & South Plains Financial (NASDAQ:SPFI) Critical Review

South Plains Financial (NASDAQ:SPFI) and Auburn National Bancorporation (NASDAQ:AUBN) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Institutional and Insider Ownership

55.0% of South Plains Financial shares are owned by institutional investors. Comparatively, 39.5% of Auburn National Bancorporation shares are owned by institutional investors. 24.6% of South Plains Financial shares are owned by company insiders. Comparatively, 25.1% of Auburn National Bancorporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

South Plains Financial has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, Auburn National Bancorporation has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500.

Dividends

South Plains Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.7%. Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 4.4%. South Plains Financial pays out 19.8% of its earnings in the form of a dividend. Auburn National Bancorporation pays out 51.9% 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. South Plains Financial has raised its dividend for 5 consecutive years.

Profitability

This table compares South Plains Financial and Auburn National Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Plains Financial	19.69%	12.51%	1.32%
Auburn National Bancorporation	16.42%	8.41%	0.72%

Analyst Ratings

This is a breakdown of current ratings and target prices for South Plains Financial and Auburn National Bancorporation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Plains Financial	0	0	5	1	3.17
Auburn National Bancorporation	0	1	0	0	2.00

South Plains Financial currently has a consensus price target of $46.75, suggesting a potential upside of 15.57%. Given South Plains Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe South Plains Financial is more favorable than Auburn National Bancorporation.

Earnings and Valuation

This table compares South Plains Financial and Auburn National Bancorporation”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Plains Financial	$211.89 million	3.12	$58.47 million	$3.44	11.76
Auburn National Bancorporation	$42.21 million	2.03	$7.26 million	$2.08	11.81

South Plains Financial has higher revenue and earnings than Auburn National Bancorporation. South Plains Financial is trading at a lower price-to-earnings ratio than Auburn National Bancorporation, indicating that it is currently the more affordable of the two stocks.

Summary

South Plains Financial beats Auburn National Bancorporation on 15 of the 18 factors compared between the two stocks.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.

About Auburn National Bancorporation

Auburn National Bancorporation, Inc. operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company offers checking, savings, and transaction deposit accounts, as well as certificates of deposit. It also provides commercial, financial, agricultural, real estate construction, and consumer loan products; and other financial services. In addition, the company offers automated teller services; debit cards; online banking, bill payment, and other electronic banking services; and safe deposit boxes. Auburn National Bancorporation, Inc. was founded in 1907 and is headquartered in Auburn, Alabama.