Nicolet Bankshares (NYSE:NIC) and SR Bancorp (NASDAQ:SRBK) Critical Survey

SR Bancorp (NASDAQ:SRBK) and Nicolet Bankshares (NYSE:NIC) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and target prices for SR Bancorp and Nicolet Bankshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SR Bancorp	0	2	0	0	2.00
Nicolet Bankshares	0	0	5	1	3.17

SR Bancorp presently has a consensus target price of $16.00, suggesting a potential downside of 3.79%. Nicolet Bankshares has a consensus target price of $179.50, suggesting a potential upside of 19.49%. Given Nicolet Bankshares’ stronger consensus rating and higher probable upside, analysts clearly believe Nicolet Bankshares is more favorable than SR Bancorp.

Dividends

SR Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.2%. Nicolet Bankshares pays an annual dividend of $1.28 per share and has a dividend yield of 0.9%. SR Bancorp pays out 55.6% of its earnings in the form of a dividend. Nicolet Bankshares pays out 13.1% 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. Nicolet Bankshares has increased its dividend for 2 consecutive years.

Earnings and Valuation

This table compares SR Bancorp and Nicolet Bankshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SR Bancorp	$33.74 million	4.11	$5.14 million	$0.36	46.19
Nicolet Bankshares	$556.52 million	3.99	$150.69 million	$9.80	15.33

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

Volatility & Risk

SR Bancorp has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Nicolet Bankshares has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Profitability

This table compares SR Bancorp and Nicolet Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SR Bancorp	5.82%	1.27%	0.22%
Nicolet Bankshares	26.98%	12.49%	1.68%

Institutional and Insider Ownership

24.7% of SR Bancorp shares are held by institutional investors. Comparatively, 43.1% of Nicolet Bankshares shares are held by institutional investors. 7.8% of SR Bancorp shares are held by company insiders. Comparatively, 16.4% of Nicolet Bankshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Nicolet Bankshares beats SR Bancorp on 15 of the 18 factors compared between the two stocks.

About SR Bancorp

SR Bancorp, Inc. operates as the holding company for Somerset Regal Bank that provides customary retail and commercial banking services to individuals, businesses, and local municipalities in the communities of Somerset, Middlesex, Hunterdon, and Essex counties in New Jersey. It offers deposit instruments, including noninterest-bearing demand deposits, interest-bearing demand accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides loans comprising one- to four family-residential mortgage loans, home equity loans and lines of credit, unsecured personal loans, and rehabilitation loans; and bill payment services. In addition, it is involved in the investment activities. The company was founded in 1887 and is headquartered in Bound Brook, New Jersey.

About Nicolet Bankshares

Nicolet Bankshares, Inc. operates as the bank holding company for Nicolet National Bank that provides banking products and services for businesses and individuals in Wisconsin and Michigan. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien and junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary services, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, and remote deposit capture services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, and official bank checks, as well as facilitates crop insurance products. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. The company was incorporated in 2000 and is headquartered in Green Bay, Wisconsin.