Financial Analysis: Simmons First National (NASDAQ:SFNC) & Mercantil Bank (NASDAQ:AMTB)

Simmons First National (NASDAQ:SFNC) and Mercantil Bank (NASDAQ:AMTB) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Insider and Institutional Ownership

25.3% of Simmons First National shares are owned by institutional investors. Comparatively, 19.1% of Mercantil Bank shares are owned by institutional investors. 1.6% of Simmons First National shares are owned by company insiders. Comparatively, 16.5% of Mercantil Bank shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Simmons First National and Mercantil Bank’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Simmons First National $988.15 million 1.78 $238.17 million $2.73 5.90
Mercantil Bank $370.08 million 1.32 $51.33 million $1.24 9.34

Simmons First National has higher revenue and earnings than Mercantil Bank. Simmons First National is trading at a lower price-to-earnings ratio than Mercantil Bank, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Simmons First National and Mercantil Bank, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Simmons First National 0 2 2 0 2.50
Mercantil Bank 0 1 0 0 2.00

Simmons First National currently has a consensus target price of $26.50, suggesting a potential upside of 64.49%. Mercantil Bank has a consensus target price of $14.00, suggesting a potential upside of 20.90%. Given Simmons First National’s stronger consensus rating and higher possible upside, equities analysts plainly believe Simmons First National is more favorable than Mercantil Bank.

Risk and Volatility

Simmons First National has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Mercantil Bank has a beta of 0.32, indicating that its stock price is 68% less volatile than the S&P 500.

Profitability

This table compares Simmons First National and Mercantil Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Simmons First National 25.20% 10.25% 1.41%
Mercantil Bank 3.75% 1.69% 0.18%

Summary

Simmons First National beats Mercantil Bank on 12 of the 14 factors compared between the two stocks.

Simmons First National Company Profile

Simmons First National Corporation operates as the holding company for Simmons Bank that provides financial products and services to individuals and businesses. It offers checking, savings, and time deposits; loan products, including consumer, real estate, commercial, agricultural, equipment, and SBA lending; personal and corporate trust services; credit cards; investment management products; insurance products; and securities and investment services. The company conducts banking operations through approximately 191 financial centers located in communities throughout Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee, and Texas. Simmons First National Corporation was founded in 1903 and is headquartered in Pine Bluff, Arkansas.

Mercantil Bank Company Profile

Mercantil Bank Holding Corporation operates as a bank holding company for Amerant Bank, N.A. that provides banking products and services to individuals and businesses in the United States and internationally. The company operates through four segments: Personal and Commercial Banking, Corporate LATAM, Treasury, and Institutional. It offers a range of checking and savings accounts, certificates of deposit, and money market accounts. The company also provides variable and fixed rate commercial real estate loans; loans secured by owner-occupied properties; loans to domestic and foreign individuals primarily secured by personal residence; working capital loans, asset-based lending, participations in shared national credits, purchased receivables, and small business administration loans; loans to financial institutions and acceptances; and consumer loans and overdrafts. In addition, it offers trust and estate planning products and services, brokerage and investment advisory services in global capital markets, and wealth management and fiduciary services. Further, the company provides debit and credit cards; remote deposit capture, online banking, mobile banking, e-statements, night depository, direct deposit, and treasury management services; and cashier's checks, safe deposit boxes, and letters of credit. As of March 21, 2019, it operated 23 banking centers comprising 15 in South Florida and 8 in Houston, as well as loan production offices in Dallas, Texas, and New York. The company was founded in 1979 and is headquartered in Coral Gables, Florida.

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