West Bancorporation (NASDAQ:WTBA – Get Free Report) and Southern Banc (OTCMKTS:SRNN – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.
Insider and Institutional Ownership
44.3% of West Bancorporation shares are held by institutional investors. 4.6% of West Bancorporation shares are held by company insiders. Comparatively, 22.0% of Southern Banc shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares West Bancorporation and Southern Banc”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| West Bancorporation | $202.45 million | 2.14 | $32.56 million | $1.91 | 13.38 |
| Southern Banc | $12.13 million | 0.75 | $920,000.00 | $1.22 | 9.26 |
West Bancorporation has higher revenue and earnings than Southern Banc. Southern Banc is trading at a lower price-to-earnings ratio than West Bancorporation, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
West Bancorporation has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Southern Banc has a beta of -0.09, suggesting that its stock price is 109% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent recommendations and price targets for West Bancorporation and Southern Banc, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| West Bancorporation | 0 | 1 | 1 | 1 | 3.00 |
| Southern Banc | 0 | 0 | 0 | 0 | 0.00 |
West Bancorporation presently has a consensus price target of $24.00, indicating a potential downside of 6.07%. Given West Bancorporation’s stronger consensus rating and higher probable upside, analysts clearly believe West Bancorporation is more favorable than Southern Banc.
Profitability
This table compares West Bancorporation and Southern Banc’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| West Bancorporation | 16.08% | 14.59% | 0.89% |
| Southern Banc | 7.47% | 5.56% | 0.74% |
Summary
West Bancorporation beats Southern Banc on 14 of the 15 factors compared between the two stocks.
About West Bancorporation
West Bancorporation, Inc. operates as the financial holding company provides community banking and trust services to individuals and small- to medium-sized businesses in the United States. It offers deposit services, including checking, savings, and money market accounts, as well as time certificates of deposit. The company also provides loan products comprising commercial real estate loans, construction and land development loans, commercial lines of credit, and commercial term loans; consumer loans, including loans extended to individuals for household, family, and other personal expenditures not secured by real estate; and 1-4 family residential mortgages and home equity loans. In addition, it offers online and mobile banking, treasury management services including cash management, client-generated automated clearing house transactions, remote deposit, and fraud protection services; merchant credit card processing and corporate credit cards; and administration of estates, conservatorships, personal trusts, and agency accounts. The company was founded in 1893 and is headquartered in West Des Moines, Iowa.
About Southern Banc
The Southern Banc Company, Inc. operates as the holding company for The Southern Bank company that provides various banking products and services in Alabama. The company’s personal banking products include checking accounts, home mortgage loans, home equity loans, auto loans, and personal loans. Its business banking products comprise business checking accounts, cash flow management, real estate lending, and equipment financing. The Southern Banc Company, Inc. was founded in 1936 and is based in Gadsden, Alabama.
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