Head-To-Head Survey: Prosperity Bancshares (NYSE:PB) & Red River Bancshares (NASDAQ:RRBI)

Prosperity Bancshares (NYSE:PB) and Red River Bancshares (NASDAQ:RRBI) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.

Institutional and Insider Ownership

80.7% of Prosperity Bancshares shares are owned by institutional investors. Comparatively, 27.6% of Red River Bancshares shares are owned by institutional investors. 4.2% of Prosperity Bancshares shares are owned by insiders. Comparatively, 15.9% of Red River Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Prosperity Bancshares and Red River Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prosperity Bancshares	0	6	10	0	2.63
Red River Bancshares	0	0	1	0	3.00

Prosperity Bancshares currently has a consensus price target of $83.40, suggesting a potential upside of 27.19%. Red River Bancshares has a consensus price target of $67.00, suggesting a potential upside of 1.24%. Given Prosperity Bancshares’ higher probable upside, analysts plainly believe Prosperity Bancshares is more favorable than Red River Bancshares.

Profitability

This table compares Prosperity Bancshares and Red River Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Prosperity Bancshares	29.37%	6.99%	1.33%
Red River Bancshares	23.62%	11.76%	1.23%

Volatility & Risk

Prosperity Bancshares has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Red River Bancshares has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.

Dividends

Prosperity Bancshares pays an annual dividend of $2.32 per share and has a dividend yield of 3.5%. Red River Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 0.9%. Prosperity Bancshares pays out 42.2% of its earnings in the form of a dividend. Red River Bancshares pays out 10.6% 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. Prosperity Bancshares has increased its dividend for 27 consecutive years and Red River Bancshares has increased its dividend for 3 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Prosperity Bancshares and Red River Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prosperity Bancshares	$1.79 billion	3.48	$479.39 million	$5.50	11.92
Red River Bancshares	$157.67 million	2.80	$34.24 million	$5.67	11.67

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

Summary

Prosperity Bancshares beats Red River Bancshares on 12 of the 17 factors compared between the two stocks.

About Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.