South Atlantic Bancshares (OTCMKTS:SABK) vs. Eagle Financial Services (NASDAQ:EFSI) Critical Review

Eagle Financial Services (NASDAQ:EFSI) and South Atlantic Bancshares (OTCMKTS:SABK) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Dividends

Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.8%. South Atlantic Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Eagle Financial Services pays out 95.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. South Atlantic Bancshares pays out 4.8% of its earnings in the form of a dividend. Eagle Financial Services has increased its dividend for 14 consecutive years. Eagle Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Eagle Financial Services and South Atlantic Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Financial Services	7.76%	9.99%	0.92%
South Atlantic Bancshares	N/A	N/A	N/A

Insider and Institutional Ownership

0.3% of Eagle Financial Services shares are owned by institutional investors. Comparatively, 13.3% of South Atlantic Bancshares shares are owned by institutional investors. 8.7% of Eagle Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Eagle Financial Services and South Atlantic Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Financial Services	$105.89 million	1.65	$8.21 million	$1.30	25.00
South Atlantic Bancshares	$102.25 million	1.69	$15.93 million	$2.10	10.83

South Atlantic Bancshares has lower revenue, but higher earnings than Eagle Financial Services. South Atlantic Bancshares is trading at a lower price-to-earnings ratio than Eagle Financial Services, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Eagle Financial Services has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500. Comparatively, South Atlantic Bancshares has a beta of 0.09, suggesting that its share price is 91% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Eagle Financial Services and South Atlantic Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Financial Services	0	3	2	0	2.40
South Atlantic Bancshares	0	1	0	0	2.00

Eagle Financial Services presently has a consensus target price of $43.00, indicating a potential upside of 32.31%. Given Eagle Financial Services’ stronger consensus rating and higher probable upside, analysts plainly believe Eagle Financial Services is more favorable than South Atlantic Bancshares.

Summary

Eagle Financial Services beats South Atlantic Bancshares on 12 of the 17 factors compared between the two stocks.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.

About South Atlantic Bancshares

South Atlantic Bancshares, Inc. operates as the bank holding company for South Atlantic Bank that provides consumer and commercial banking products and services to individuals, small businesses, and corporations in South Carolina. The company offers checking, money market, and saving accounts, as well as certificate of deposit, individual retirement, and health saving accounts; personal, auto, and recreation loans, as well as home equity and ready reserve overdraft line of credits, and commercial lending products; and credit cards. It also provides cash management and merchant card services; remote deposit capture and automated clearing house services; online, mobile, and telephone banking services; personal and business checks; mortgage products and services; and wealth management services. The company operates offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, and Beaufort, South Carolina. South Atlantic Bancshares, Inc. was founded in 2007 and is headquartered in Myrtle Beach, South Carolina.