Contrasting First Financial (NASDAQ:THFF) and Southside Bancshares (NASDAQ:SBSI)

First Financial (NASDAQ:THFF) and Southside Bancshares (NASDAQ:SBSI) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Risk and Volatility

First Financial has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.

Dividends

First Financial pays an annual dividend of $1.80 per share and has a dividend yield of 5.1%. Southside Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 5.4%. First Financial pays out 35.4% of its earnings in the form of a dividend. Southside Bancshares pays out 51.2% 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. Southside Bancshares has increased 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 First Financial and Southside Bancshares’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial	$271.10 million	1.53	$60.67 million	$5.09	6.92
Southside Bancshares	$395.58 million	2.06	$86.69 million	$2.81	9.58

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

Profitability

This table compares First Financial and Southside Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial	22.38%	12.13%	1.25%
Southside Bancshares	21.92%	11.59%	1.10%

Analyst Ratings

This is a breakdown of recent recommendations for First Financial and Southside Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial	0	1	0	0	2.00
Southside Bancshares	0	0	0	0	N/A

First Financial currently has a consensus price target of $43.00, suggesting a potential upside of 22.16%. Southside Bancshares has a consensus price target of $33.50, suggesting a potential upside of 24.49%. Given Southside Bancshares’ higher possible upside, analysts plainly believe Southside Bancshares is more favorable than First Financial.

Insider and Institutional Ownership

72.7% of First Financial shares are held by institutional investors. Comparatively, 55.7% of Southside Bancshares shares are held by institutional investors. 4.1% of First Financial shares are held by insiders. Comparatively, 6.1% of Southside Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Southside Bancshares beats First Financial on 9 of the 15 factors compared between the two stocks.

About First Financial

First Financial Corporation, through its subsidiaries, provides various financial services. The company offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. It also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, the company offers lease financing, trust account, depositor, and insurance services. The company was founded in 1834 and is headquartered in Terre Haute, Indiana.

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 deposits. 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 of irrevocable, revocable, and testamentary trusts, estate administration, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. In addition, the company provides retirement and employee benefit accounts, including plans and profit sharing plans; and telephone, internet, and mobile banking services. The company offers various banking services through branches, drive-thru facilities, automated teller machines, and interactive teller machines. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.