Contrasting Southside Bancshares (NYSE:SBSI) and MidWestOne Financial Group (NASDAQ:MOFG)

MidWestOne Financial Group (NASDAQ:MOFG) and Southside Bancshares (NYSE:SBSI) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Institutional and Insider Ownership

65.4% of MidWestOne Financial Group shares are held by institutional investors. Comparatively, 55.7% of Southside Bancshares shares are held by institutional investors. 2.5% of MidWestOne Financial Group shares are held by insiders. Comparatively, 5.1% of Southside Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares MidWestOne Financial Group and Southside Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MidWestOne Financial Group	16.66%	10.22%	0.96%
Southside Bancshares	21.48%	11.58%	1.14%

Dividends

MidWestOne Financial Group pays an annual dividend of $0.97 per share and has a dividend yield of 2.0%. Southside Bancshares pays an annual dividend of $1.48 per share and has a dividend yield of 4.3%. MidWestOne Financial Group pays out 34.5% of its earnings in the form of a dividend. Southside Bancshares pays out 44.7% 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. Southside Bancshares has raised its dividend for 30 consecutive years. Southside Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

MidWestOne Financial Group has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Valuation and Earnings

This table compares MidWestOne Financial Group and Southside Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MidWestOne Financial Group	$238.84 million	4.26	-$60.29 million	$2.81	17.55
Southside Bancshares	$419.03 million	2.47	$69.18 million	$3.31	10.49

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for MidWestOne Financial Group and Southside Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MidWestOne Financial Group	0	1	0	0	2.00
Southside Bancshares	0	4	1	1	2.50

Southside Bancshares has a consensus price target of $34.75, indicating a potential upside of 0.10%. Given Southside Bancshares’ stronger consensus rating and higher possible upside, analysts plainly believe Southside Bancshares is more favorable than MidWestOne Financial Group.

Summary

Southside Bancshares beats MidWestOne Financial Group on 13 of the 18 factors compared between the two stocks.

About MidWestOne Financial Group

MidWestOne Financial Group, Inc. is a bank holding company headquartered in Iowa City, Iowa. Through its subsidiary, MidWestOne Bank, the company provides community banking services to individuals, businesses and organizations. Its offerings include deposit accounts, consumer and commercial loans, mortgage lending, cash management, and wealth management and trust services. The bank serves customers through offices in Iowa, Minnesota, Wisconsin and Colorado.

About Southside Bancshares

Southside Bancshares, Inc. is a bank holding company whose principal subsidiary, Southside Bank, provides banking and financial services to individuals, businesses and organizations. Its offerings include deposit accounts, consumer and commercial loans, mortgage services, and trust and wealth management services. Founded in Tyler, Texas, in 1960, Southside Bank has grown from a community bank into a regional institution. It serves customers through branches and other banking channels across Texas, with a presence in East, North, Central and Southeast Texas.