Nicolet Bankshares (NYSE:NIC) and SmartFinancial (NASDAQ:SMBK) Critical Review

Nicolet Bankshares (NYSE:NIC) and SmartFinancial (NASDAQ:SMBK) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Volatility & Risk

Nicolet Bankshares has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, SmartFinancial has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Nicolet Bankshares and SmartFinancial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nicolet Bankshares	0	3	1	0	2.25
SmartFinancial	0	2	2	1	2.80

Nicolet Bankshares presently has a consensus target price of $87.88, indicating a potential upside of 10.20%. SmartFinancial has a consensus target price of $25.40, indicating a potential upside of 22.94%. Given SmartFinancial’s stronger consensus rating and higher possible upside, analysts plainly believe SmartFinancial is more favorable than Nicolet Bankshares.

Profitability

This table compares Nicolet Bankshares and SmartFinancial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nicolet Bankshares	20.60%	10.07%	1.19%
SmartFinancial	10.65%	6.94%	0.65%

Earnings & Valuation

This table compares Nicolet Bankshares and SmartFinancial’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nicolet Bankshares	$277.85 million	4.26	$61.52 million	$6.49	12.29
SmartFinancial	$240.37 million	1.47	$28.59 million	$1.56	13.24

Nicolet Bankshares has higher revenue and earnings than SmartFinancial. Nicolet Bankshares is trading at a lower price-to-earnings ratio than SmartFinancial, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

43.1% of Nicolet Bankshares shares are held by institutional investors. Comparatively, 58.8% of SmartFinancial shares are held by institutional investors. 16.4% of Nicolet Bankshares shares are held by insiders. Comparatively, 7.8% of SmartFinancial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Nicolet Bankshares pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. SmartFinancial pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Nicolet Bankshares pays out 15.4% of its earnings in the form of a dividend. SmartFinancial pays out 20.5% 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.

Summary

Nicolet Bankshares beats SmartFinancial on 10 of the 17 factors compared between the two stocks.

About Nicolet Bankshares

Nicolet Bankshares, Inc. operates as the bank holding company for Nicolet National Bank that provides banking products and services for businesses and individuals in Wisconsin and Michigan. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien and junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary services, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, and remote deposit capture services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, and official bank checks, as well as facilitates crop insurance products. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. The company was incorporated in 2000 and is headquartered in Green Bay, Wisconsin.

About SmartFinancial

SmartFinancial, Inc. operates as the bank holding company for SmartBank that provides various financial services to individuals and corporate customers in Tennessee, Alabama, and Florida. It operates through Commercial Real Estate, Consumer Real Estate, Construction and Land Development, Commercial and Industrial, Leases, and Consumer and Other segments. The company offers noninterest-bearing and interest-bearing checking, interest-bearing demand, savings, money market, time deposit, individual retirement accounts, as well as certificates of deposit. It also provides commercial and residential real estate, consumer real estate, and construction and land development loans; commercial and financial loans and leases; commercial business and mortgage loans; and direct consumer installment, educational, agriculture, and other revolving credit loans; equipment financing, heavy equipment, semis, and trailers loans and leases to small and mid-size companies; letters of credit; and overdraft facilities. In addition, the company offers wealth management, insurance, mortgage origination, and internet and mobile banking services. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.