National Bank (NYSE:NBHC) and South Plains Financial (NASDAQ:SPFI) Head to Head Review

National Bank (NYSE:NBHC) and South Plains Financial (NASDAQ:SPFI) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, valuation, institutional ownership and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for National Bank and South Plains Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bank	0	4	1	0	2.20
South Plains Financial	0	0	3	0	3.00

National Bank currently has a consensus price target of $47.20, indicating a potential upside of 30.75%. South Plains Financial has a consensus price target of $44.6667, indicating a potential upside of 24.04%. Given National Bank’s higher possible upside, equities analysts plainly believe National Bank is more favorable than South Plains Financial.

Profitability

This table compares National Bank and South Plains Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bank	20.02%	9.44%	1.25%
South Plains Financial	18.59%	12.27%	1.26%

Institutional & Insider Ownership

92.7% of National Bank shares are owned by institutional investors. Comparatively, 55.0% of South Plains Financial shares are owned by institutional investors. 2.9% of National Bank shares are owned by insiders. Comparatively, 24.6% of South Plains Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

National Bank pays an annual dividend of $1.20 per share and has a dividend yield of 3.3%. South Plains Financial pays an annual dividend of $0.64 per share and has a dividend yield of 1.8%. National Bank pays out 38.7% of its earnings in the form of a dividend. South Plains Financial pays out 20.0% 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 increased its dividend for 10 consecutive years and South Plains Financial has increased its dividend for 5 consecutive years. National Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares National Bank and South Plains Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bank	$599.50 million	2.29	$118.82 million	$3.10	11.65
South Plains Financial	$288.97 million	2.02	$49.72 million	$3.20	11.25

National Bank has higher revenue and earnings than South Plains Financial. South Plains Financial is trading at a lower price-to-earnings ratio than National Bank, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

National Bank has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, South Plains Financial has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Summary

National Bank beats South Plains Financial on 10 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 South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.