Southern Missouri Bancorp (NASDAQ:SMBC) & Lake Shore Bancorp (NASDAQ:LSBK) Critical Analysis

Southern Missouri Bancorp (NASDAQ:SMBC) and Lake Shore Bancorp (NASDAQ:LSBK) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.

Profitability

This table compares Southern Missouri Bancorp and Lake Shore Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern Missouri Bancorp	20.80%	11.92%	1.30%
Lake Shore Bancorp	18.38%	6.26%	1.00%

Institutional & Insider Ownership

49.5% of Southern Missouri Bancorp shares are owned by institutional investors. Comparatively, 8.8% of Lake Shore Bancorp shares are owned by institutional investors. 15.8% of Southern Missouri Bancorp shares are owned by insiders. Comparatively, 4.1% of Lake Shore Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations for Southern Missouri Bancorp and Lake Shore Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Missouri Bancorp	0	2	2	0	2.50
Lake Shore Bancorp	0	1	0	0	2.00

Southern Missouri Bancorp currently has a consensus target price of $68.67, suggesting a potential upside of 2.79%. Given Southern Missouri Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe Southern Missouri Bancorp is more favorable than Lake Shore Bancorp.

Dividends

Southern Missouri Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 1.5%. Lake Shore Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 2.3%. Southern Missouri Bancorp pays out 17.3% of its earnings in the form of a dividend. Lake Shore Bancorp pays out 34.0% 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. Southern Missouri Bancorp has increased its dividend for 13 consecutive years.

Earnings & Valuation

This table compares Southern Missouri Bancorp and Lake Shore Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Missouri Bancorp	$305.35 million	2.43	$58.58 million	$5.78	11.56
Lake Shore Bancorp	$27.84 million	4.43	$7.27 million	$1.06	14.80

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

Volatility and Risk

Southern Missouri Bancorp has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Lake Shore Bancorp has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500.

Summary

Southern Missouri Bancorp beats Lake Shore Bancorp on 14 of the 17 factors compared between the two stocks.

About Southern Missouri Bancorp

Southern Missouri Bancorp, Inc. operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. The company offers deposits products, including interest-bearing and noninterest-bearing transaction accounts, saving accounts, certificates of deposit, retirement savings plans, and money market deposit accounts. It also provides loans, such as residential mortgage, commercial real estate, construction, and commercial business loans; and consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, the company offers fiduciary and investment management services; commercial and consumer insurance; online and mobile banking services; and debit or credit cards. The company was founded in 1887 and is headquartered in Poplar Bluff, Missouri.

About Lake Shore Bancorp

Lake Shore Bancorp, Inc. operates as a savings and loan holding company for Lake Shore Servings Bank. It offers personal services such as checking, savings, lending, banking, debit card, e-services, and online banking; and business services including deposit products, commercial loans, and business e-statements. The company was founded in 2006 and is headquartered in Dunkirk, NY.