Comparing Eastern Bankshares (NASDAQ:EBC) & SmartFinancial (NASDAQ:SMBK)

SmartFinancial (NASDAQ:SMBK) and Eastern Bankshares (NASDAQ:EBC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Valuation & Earnings

This table compares SmartFinancial and Eastern Bankshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SmartFinancial	$220.61 million	3.76	$36.14 million	$3.68	13.19
Eastern Bankshares	$1.19 billion	4.34	$397.61 million	$1.74	12.98

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

Insider and Institutional Ownership

58.8% of SmartFinancial shares are owned by institutional investors. Comparatively, 71.7% of Eastern Bankshares shares are owned by institutional investors. 6.9% of SmartFinancial shares are owned by insiders. Comparatively, 1.3% of Eastern Bankshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for SmartFinancial and Eastern Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SmartFinancial	0	3	3	0	2.50
Eastern Bankshares	0	3	6	0	2.67

SmartFinancial currently has a consensus price target of $52.60, suggesting a potential upside of 8.40%. Eastern Bankshares has a consensus price target of $25.00, suggesting a potential upside of 10.72%. Given Eastern Bankshares’ stronger consensus rating and higher probable upside, analysts clearly believe Eastern Bankshares is more favorable than SmartFinancial.

Profitability

This table compares SmartFinancial and Eastern Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SmartFinancial	12.67%	7.33%	0.71%
Eastern Bankshares	N/A	N/A	N/A

Risk and Volatility

SmartFinancial has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, Eastern Bankshares has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Dividends

SmartFinancial pays an annual dividend of $0.36 per share and has a dividend yield of 0.7%. Eastern Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.7%. SmartFinancial pays out 9.8% of its earnings in the form of a dividend. Eastern Bankshares pays out 34.5% 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. SmartFinancial has increased its dividend for 3 consecutive years and Eastern Bankshares has increased its dividend for 5 consecutive years. Eastern Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Eastern Bankshares beats SmartFinancial on 9 of the 17 factors compared between the two stocks.

About SmartFinancial

SmartFinancial, Inc. operates as the bank holding company for SmartBank that provides various financial services to individuals and corporate customers in Tennessee, Alabama, and Florida. It operates through Commercial Real Estate, Consumer Real Estate, Construction and Land Development, Commercial and Industrial, Leases, and Consumer and Other segments. The company offers noninterest-bearing and interest-bearing checking, interest-bearing demand, savings, money market, time deposit, individual retirement accounts, as well as certificates of deposit. It also provides commercial and residential real estate, consumer real estate, and construction and land development loans; commercial and financial loans and leases; commercial business and mortgage loans; and direct consumer installment, educational, agriculture, and other revolving credit loans; equipment financing, heavy equipment, semis, and trailers loans and leases to small and mid-size companies; letters of credit; and overdraft facilities. In addition, the company offers wealth management, insurance, mortgage origination, and internet and mobile banking services. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.