Reviewing Southside Bancshares (NYSE:SBSI) & Red River Bancshares (NASDAQ:RRBI)

Red River Bancshares (NASDAQ:RRBI) and Southside Bancshares (NYSE:SBSI) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Analyst Recommendations

This is a summary of current ratings and price targets for Red River Bancshares and Southside Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red River Bancshares	0	0	2	1	3.33
Southside Bancshares	0	1	0	0	2.00

Red River Bancshares currently has a consensus price target of $67.00, indicating a potential downside of 24.63%. Given Red River Bancshares’ stronger consensus rating and higher probable upside, research analysts clearly believe Red River Bancshares is more favorable than Southside Bancshares.

Volatility and Risk

Red River Bancshares has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Red River Bancshares	25.18%	12.58%	1.34%
Southside Bancshares	15.61%	10.72%	1.06%

Institutional and Insider Ownership

27.6% of Red River Bancshares shares are owned by institutional investors. Comparatively, 55.7% of Southside Bancshares shares are owned by institutional investors. 15.9% of Red River Bancshares shares are owned by company insiders. Comparatively, 6.0% of Southside Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Red River Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 0.7%. Southside Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 4.3%. Red River Bancshares pays out 9.4% of its earnings in the form of a dividend. Southside Bancshares pays out 62.9% 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. Red River Bancshares has raised its dividend for 3 consecutive years and 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.

Earnings & Valuation

This table compares Red River Bancshares and Southside Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red River Bancshares	$169.85 million	3.44	$42.76 million	$6.39	13.91
Southside Bancshares	$419.03 million	2.38	$69.22 million	$2.29	14.47

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

Summary

Red River Bancshares beats Southside Bancshares on 11 of the 18 factors compared between the two stocks.

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.

About Southside Bancshares

Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposit. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration, revocable and testamentary trusts, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. As of December 31, 2021, the company operated through 56 banking facilities and 73 ATMs/ITMs. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.