Analyzing Southside Bancshares (NYSE:SBSI) & Freddie Mac (OTCMKTS:FMCC)

Freddie Mac (OTCMKTS:FMCC) and Southside Bancshares (NYSE:SBSI) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Freddie Mac and Southside Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Freddie Mac	1	2	1	1	2.40
Southside Bancshares	1	4	1	0	2.00

Freddie Mac presently has a consensus target price of $12.38, suggesting a potential upside of 193.94%. Southside Bancshares has a consensus target price of $34.75, suggesting a potential upside of 12.47%. Given Freddie Mac’s stronger consensus rating and higher probable upside, analysts clearly believe Freddie Mac is more favorable than Southside Bancshares.

Valuation and Earnings

This table compares Freddie Mac and Southside Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Freddie Mac	$129.82 billion	0.02	$10.73 billion	$0.01	421.00
Southside Bancshares	$419.03 million	2.20	$69.18 million	$2.54	12.16

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

Risk & Volatility

Freddie Mac has a beta of 1.73, indicating that its stock price is 73% more volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Profitability

This table compares Freddie Mac and Southside Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Freddie Mac	9.58%	-90.29%	0.37%
Southside Bancshares	16.70%	11.16%	1.11%

Institutional and Insider Ownership

55.7% of Southside Bancshares shares are held by institutional investors. 0.1% of Freddie Mac shares are held by company insiders. Comparatively, 5.1% of Southside Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

About Freddie Mac

Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit and market risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, housing finance agencies, savings institutions, and non-depository financial institutions. The Multifamily segment engages in the purchase, securitization, and guarantee of multifamily loans; issuance of multifamily K certificates; manages multifamily mortgage credit and market risk; and invests in multifamily loans and mortgage-related securities. It serves banks and other financial institutions, insurance companies, money managers, hedge funds, pension funds, state and local governments, and broker dealers. Federal Home Loan Mortgage Corporation incorporated in 1970 and is headquartered in McLean, Virginia.

About Southside Bancshares

Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposit. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration, revocable and testamentary trusts, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. As of December 31, 2021, the company operated through 56 banking facilities and 73 ATMs/ITMs. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.