Head to Head Review: Pinnacle Bankshares (OTCMKTS:PPBN) & South Plains Financial (NASDAQ:SPFI)

Pinnacle Bankshares (OTCMKTS:PPBN) and South Plains Financial (NASDAQ:SPFI) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Institutional and Insider Ownership

3.8% of Pinnacle Bankshares shares are owned by institutional investors. Comparatively, 55.0% of South Plains Financial shares are owned by institutional investors. 6.5% of Pinnacle Bankshares shares are owned by company insiders. Comparatively, 24.3% of South Plains Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Pinnacle Bankshares and South Plains Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pinnacle Bankshares	19.32%	13.27%	1.11%
South Plains Financial	20.22%	12.78%	1.37%

Valuation and Earnings

This table compares Pinnacle Bankshares and South Plains Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pinnacle Bankshares	$59.05 million	1.83	$10.77 million	$5.21	9.62
South Plains Financial	$296.89 million	2.28	$58.47 million	$3.57	11.62

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

Volatility and Risk

Pinnacle Bankshares has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500. Comparatively, South Plains Financial has a beta of 0.49, meaning that its stock price is 51% less volatile than the S&P 500.

Dividends

Pinnacle Bankshares pays an annual dividend of $1.12 per share and has a dividend yield of 2.2%. South Plains Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.6%. Pinnacle Bankshares pays out 21.5% of its earnings in the form of a dividend. South Plains Financial pays out 19.0% 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. South Plains Financial has raised its dividend for 5 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Pinnacle Bankshares and South Plains Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pinnacle Bankshares	0	0	0	0	0.00
South Plains Financial	0	1	5	0	2.83

South Plains Financial has a consensus target price of $46.25, indicating a potential upside of 11.47%. Given South Plains Financial’s stronger consensus rating and higher possible upside, analysts clearly believe South Plains Financial is more favorable than Pinnacle Bankshares.

Summary

South Plains Financial beats Pinnacle Bankshares on 14 of the 17 factors compared between the two stocks.

About Pinnacle Bankshares

Pinnacle Bankshares Corporation operates as the bank holding company for First National Bank that provides a range of commercial and retail banking products and services. The company accepts checking accounts, savings and time deposits, individual retirement accounts, certificates of deposit, and money market accounts. Its loan products include residential and commercial mortgage loans, home equity loans, consumer installment loans, agricultural loans, investment loans, small business loans, commercial lines of credit, and letters of credit. The company also provides credit cards; insurance products, including property and casualty, life, and health; investment and annuity products; and overdraft protection, merchant bankcard processing, cash management, remote deposit capture, night drop, safe deposit boxes, and notary services, as well as telephone, mobile, and online banking services. It operates branches in Amherst County, Bedford County, Campbell County, Pittsylvania County; and the city of Danville, Lynchburg and Charlottesville. The company was founded in 1908 and is headquartered in Altavista, Virginia.

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.