Critical Review: Northpointe Bancshares (NYSE:NPB) and Southern Missouri Bancorp (NASDAQ:SMBC)

Northpointe Bancshares (NYSE:NPB) and Southern Missouri Bancorp (NASDAQ:SMBC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.

Institutional & Insider Ownership

49.5% of Southern Missouri Bancorp shares are owned by institutional investors. 18.3% of Northpointe Bancshares shares are owned by company insiders. Comparatively, 15.8% of Southern Missouri Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Northpointe Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. Southern Missouri Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Northpointe Bancshares pays out 4.5% of its earnings in the form of a dividend. Southern Missouri Bancorp pays out 16.7% 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. Southern Missouri Bancorp has raised its dividend for 13 consecutive years. Southern Missouri Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Northpointe Bancshares and Southern Missouri Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northpointe Bancshares	$471.18 million	1.40	$83.41 million	$2.22	8.61
Southern Missouri Bancorp	$305.35 million	2.81	$58.58 million	$5.99	12.98

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

Analyst Ratings

This is a breakdown of recent recommendations for Northpointe Bancshares and Southern Missouri Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northpointe Bancshares	1	2	1	0	2.00
Southern Missouri Bancorp	0	2	2	0	2.50

Northpointe Bancshares currently has a consensus target price of $19.83, indicating a potential upside of 3.73%. Southern Missouri Bancorp has a consensus target price of $73.33, indicating a potential downside of 5.72%. Given Northpointe Bancshares’ higher probable upside, equities analysts clearly believe Northpointe Bancshares is more favorable than Southern Missouri Bancorp.

Profitability

This table compares Northpointe Bancshares and Southern Missouri Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northpointe Bancshares	17.92%	14.80%	1.28%
Southern Missouri Bancorp	21.36%	12.05%	1.33%

Summary

Southern Missouri Bancorp beats Northpointe Bancshares on 10 of the 16 factors compared between the two stocks.

About Northpointe Bancshares

Northpointe Bancshares, Inc. operates as a bank holding company. It offers a nationwide mortgage purchase program, residential mortgage loans, digital deposit banking to retail customers and custodial deposit services. The company was founded by Charles A. Williams in 1998 and is headquartered in Grand Rapids, MI.

About Southern Missouri Bancorp

Southern Missouri Bancorp, Inc. operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. The company offers deposits products, including interest-bearing and noninterest-bearing transaction accounts, saving accounts, certificates of deposit, retirement savings plans, and money market deposit accounts. It also provides loans, such as residential mortgage, commercial real estate, construction, and commercial business loans; and consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, the company offers fiduciary and investment management services; commercial and consumer insurance; online and mobile banking services; and debit or credit cards. The company was founded in 1887 and is headquartered in Poplar Bluff, Missouri.