National Bank (NYSE:NBHC – Get Free Report) and Carter Bankshares (NASDAQ:CARE – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.
Risk & Volatility
National Bank has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500. Comparatively, Carter Bankshares has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for National Bank and Carter Bankshares, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National Bank | 0 | 2 | 3 | 0 | 2.60 |
| Carter Bankshares | 0 | 4 | 1 | 0 | 2.20 |
Dividends
National Bank pays an annual dividend of $1.28 per share and has a dividend yield of 3.4%. Carter Bankshares pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. National Bank pays out 53.8% of its earnings in the form of a dividend. Carter Bankshares pays out 6.9% 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. National Bank has raised its dividend for 10 consecutive years. National Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
92.7% of National Bank shares are held by institutional investors. Comparatively, 41.5% of Carter Bankshares shares are held by institutional investors. 6.8% of National Bank shares are held by insiders. Comparatively, 2.4% of Carter Bankshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation and Earnings
This table compares National Bank and Carter Bankshares”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| National Bank | $587.34 million | 2.87 | $109.57 million | $2.38 | 15.91 |
| Carter Bankshares | $214.28 million | 3.13 | $31.00 million | $5.81 | 5.21 |
National Bank has higher revenue and earnings than Carter Bankshares. Carter Bankshares is trading at a lower price-to-earnings ratio than National Bank, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares National Bank and Carter Bankshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National Bank | 15.11% | 8.35% | 1.13% |
| Carter Bankshares | 36.79% | 7.46% | 0.73% |
Summary
National Bank beats Carter Bankshares on 13 of the 17 factors compared between the two stocks.
About National Bank
National Bank Holdings Corporation operates as the bank holding company for NBH Bank that provides various banking products and financial services to commercial, business, and consumer clients in the United States. It offers deposit products, including checking, savings, money market, and other deposit accounts, including fixed-rate and fixed maturity time deposits. The company also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, food and agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases; non-owner occupied commercial real estate loans consisting of loans on commercial properties, such as office buildings, warehouse/distribution buildings, multi-family, hospitality, and retail buildings; small business administration loans to support small businesses and entrepreneurs; term loans, line of credits, and real estate secured loans; residential real estate loans; and consumer loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. The company operates through a network of banking centers located in Colorado, the greater Kansas City region, New Mexico, Utah, Wyoming, Idaho, and Texas. It also operates ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. The company was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.
About Carter Bankshares
Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.
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