Critical Analysis: Surrey Bancorp (OTCMKTS:SRYB) & Renasant (NASDAQ:RNST)

Renasant (NASDAQ:RNST) and Surrey Bancorp (OTCMKTS:SRYB) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Profitability

This table compares Renasant and Surrey Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Renasant	17.91%	6.58%	0.93%
Surrey Bancorp	37.97%	N/A	N/A

Earnings & Valuation

This table compares Renasant and Surrey Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Renasant	$874.43 million	3.83	$195.46 million	$1.99	17.71
Surrey Bancorp	$16.20 million	4.23	$5.10 million	$1.52	10.99

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

Insider and Institutional Ownership

77.3% of Renasant shares are owned by institutional investors. Comparatively, 3.7% of Surrey Bancorp shares are owned by institutional investors. 2.8% of Renasant shares are owned by company insiders. Comparatively, 33.7% of Surrey Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Renasant and Surrey Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Renasant	0	0	6	1	3.14
Surrey Bancorp	0	0	0	0	0.00

Renasant currently has a consensus price target of $43.17, indicating a potential upside of 22.47%. Given Renasant’s stronger consensus rating and higher probable upside, analysts clearly believe Renasant is more favorable than Surrey Bancorp.

Risk & Volatility

Renasant has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Surrey Bancorp has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Dividends

Renasant pays an annual dividend of $0.92 per share and has a dividend yield of 2.6%. Surrey Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.9%. Renasant pays out 46.2% of its earnings in the form of a dividend. Surrey Bancorp pays out 31.6% 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. Surrey Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Renasant beats Surrey Bancorp on 11 of the 17 factors compared between the two stocks.

About Renasant

Renasant Corporation operates as a bank holding company for Renasant Bank that provides a range of financial, wealth management, fiduciary, and insurance services to retail and commercial customers. The company operates through Community Banks, Insurance, and Wealth Management segments. The Community Banks segment offers checking and savings accounts, business and personal loans, asset-based lending, and factoring equipment leasing services, as well as safe deposit and night depository facilities. It also provides commercial, financial, and agricultural loans; equipment financing and leasing; real estate1-4 family mortgage; real estatecommercial mortgage; real estateconstruction loans for the construction of single family residential properties, multi-family properties, and commercial projects; installment loans to individuals; and interim construction loans, as well as automated teller machine (ATM), online and mobile banking, call center, and treasury management services. The Insurance segment provides insurance agency services, such as commercial and personal insurance products through insurance carriers. The Wealth Management segment offers a range of wealth management and fiduciary services, including administration and management of trust accounts, such as personal and corporate benefit accounts, and custodial accounts, as well as accounting and money management for trust accounts; annuities, mutual funds, and other investment services through a third party broker-dealer; administrative and compliance services; and qualified retirement plans, IRAs, employee benefit plans, personal trusts, and estates. Renasant Corporation was founded in 1904 and is headquartered in Tupelo, Mississippi.

About Surrey Bancorp

Surrey BanCorp engages in the provision of banking solutions through its subsidiaries, Surrey Bank & Trust . It offers checking accounts, savings, deposit services, mortgages, real estate loans, commercial credit products, business checking, and electronic banking. The company was founded on May 1, 2003 and is headquartered in Mount Airy, NC.