Critical Survey: Bank of the James Financial Group (NASDAQ:BOTJ) versus Trustmark (NASDAQ:TRMK)

Bank of the James Financial Group (NASDAQ:BOTJ) and Trustmark (NASDAQ:TRMK) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Institutional and Insider Ownership

18.5% of Bank of the James Financial Group shares are owned by institutional investors. Comparatively, 67.6% of Trustmark shares are owned by institutional investors. 15.4% of Bank of the James Financial Group shares are owned by company insiders. Comparatively, 1.5% of Trustmark shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Bank of the James Financial Group and Trustmark, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of the James Financial Group	0	1	0	0	2.00
Trustmark	0	3	2	0	2.40

Trustmark has a consensus price target of $43.83, suggesting a potential upside of 5.22%. Given Trustmark’s stronger consensus rating and higher probable upside, analysts clearly believe Trustmark is more favorable than Bank of the James Financial Group.

Volatility & Risk

Bank of the James Financial Group has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500. Comparatively, Trustmark has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Dividends

Bank of the James Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 2.0%. Trustmark pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. Bank of the James Financial Group pays out 20.0% of its earnings in the form of a dividend. Trustmark pays out 27.0% 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. Bank of the James Financial Group has increased its dividend for 5 consecutive years and Trustmark has increased its dividend for 1 consecutive years.

Earnings & Valuation

This table compares Bank of the James Financial Group and Trustmark”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of the James Financial Group	$62.51 million	N/A	$9.02 million	$2.00	9.93
Trustmark	$1.12 billion	2.18	$224.13 million	$3.71	11.23

Trustmark has higher revenue and earnings than Bank of the James Financial Group. Bank of the James Financial Group is trading at a lower price-to-earnings ratio than Trustmark, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bank of the James Financial Group and Trustmark’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of the James Financial Group	14.43%	12.47%	0.89%
Trustmark	19.95%	10.77%	1.20%

Summary

Trustmark beats Bank of the James Financial Group on 12 of the 16 factors compared between the two stocks.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also provides loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it offers other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company provides mortgage banking; investment advisory services; securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1999 and is headquartered in Lynchburg, Virginia.

About Trustmark

Trustmark Corporation operates as the bank holding company for Trustmark National Bank that provides banking and other financial solutions to individuals and corporate institutions in the United States. The company operates through three segments: General Banking, Wealth Management, and Insurance. It offers checking, savings, and money market accounts; certificates of deposits and individual retirement accounts; financing for commercial and industrial projects, income-producing commercial real estate, owner-occupied real estate, and construction and land development; and installment and real estate loans, and lines of credit, as well as treasury management services. The company also provides mortgage banking services, including construction financing, production of conventional and government-insured mortgages, and secondary marketing and mortgage servicing. In addition, it provides wealth management and trust services, such as administration of personal trusts and estates; management of investment accounts for individuals, employee benefit plans, and charitable foundations; and corporate trust and institutional custody, securities brokerage, financial and estate planning, retirement plan, and investment management services. Further, the company offers business insurance products and services for medical professionals, construction, manufacturing, hospitality, real estate, and group life and health plans; and life and health insurance, and personal line policies for individual customers. Trustmark Corporation was founded in 1889 and is headquartered in Jackson, Mississippi.