Analyzing ServisFirst Bancshares (NYSE:SFBS) and NASB Financial (OTCMKTS:NASB)

ServisFirst Bancshares (NYSE:SFBS) and NASB Financial (OTCMKTS:NASB) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Volatility & Risk

ServisFirst Bancshares has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, NASB Financial has a beta of 0.02, suggesting that its stock price is 98% less volatile than the S&P 500.

Profitability

This table compares ServisFirst Bancshares and NASB Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ServisFirst Bancshares	28.80%	16.95%	1.74%
NASB Financial	16.14%	7.65%	1.11%

Insider and Institutional Ownership

67.3% of ServisFirst Bancshares shares are owned by institutional investors. 6.5% of ServisFirst Bancshares shares are owned by company insiders. Comparatively, 47.0% of NASB Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for ServisFirst Bancshares and NASB Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServisFirst Bancshares	0	2	2	1	2.80
NASB Financial	0	0	0	0	0.00

ServisFirst Bancshares currently has a consensus target price of $94.33, suggesting a potential upside of 20.85%. Given ServisFirst Bancshares’ stronger consensus rating and higher possible upside, research analysts clearly believe ServisFirst Bancshares is more favorable than NASB Financial.

Dividends

ServisFirst Bancshares pays an annual dividend of $1.52 per share and has a dividend yield of 1.9%. NASB Financial pays an annual dividend of $1.40 per share and has a dividend yield of 3.5%. ServisFirst Bancshares pays out 28.0% of its earnings in the form of a dividend. NASB Financial pays out 30.9% 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. ServisFirst Bancshares has raised its dividend for 10 consecutive years.

Valuation & Earnings

This table compares ServisFirst Bancshares and NASB Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServisFirst Bancshares	$1.02 billion	4.19	$276.60 million	$5.42	14.40
NASB Financial	$178.01 million	1.62	$28.72 million	$4.53	8.90

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

Summary

ServisFirst Bancshares beats NASB Financial on 16 of the 18 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

About NASB Financial

NASB Financial, Inc. operates as a unitary thrift holding company for North American Savings Bank, F.S.B. that provides various banking products and services in the United States. The company offers checking, savings, money market, and certificate of deposit accounts. It also mortgages and refinancing products, including conventional, veterans administration, federal housing administration, jumbo, and IRA residential real-estate loans. In addition, the company provides commercial real estate development and commercial loans, such as multifamily, retail, single-tenant, multi-tenant, office, industrial, and other loans; investment property loans; and construction and development loans. The company was founded in 1927 and is based in Grandview, Missouri.