Eagle Bancorp (NASDAQ:EGBN) vs. ServisFirst Bancshares (NYSE:SFBS) Critical Survey

Eagle Bancorp (NASDAQ:EGBN) and ServisFirst Bancshares (NYSE:SFBS) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Insider & Institutional Ownership

78.0% of Eagle Bancorp shares are owned by institutional investors. Comparatively, 67.3% of ServisFirst Bancshares shares are owned by institutional investors. 3.1% of Eagle Bancorp shares are owned by company insiders. Comparatively, 7.4% of ServisFirst Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Eagle Bancorp pays an annual dividend of $0.66 per share and has a dividend yield of 2.6%. ServisFirst Bancshares pays an annual dividend of $1.34 per share and has a dividend yield of 1.6%. Eagle Bancorp pays out -47.1% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 35.8% 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. Eagle Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Eagle Bancorp has a beta of 1.09, meaning that its stock price is 9% more volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Profitability

This table compares Eagle Bancorp and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Bancorp	-5.97%	5.04%	0.54%
ServisFirst Bancshares	21.16%	14.23%	1.33%

Earnings and Valuation

This table compares Eagle Bancorp and ServisFirst Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Bancorp	$309.65 million	2.46	$100.53 million	($1.40)	-18.04
ServisFirst Bancshares	$443.96 million	10.27	$206.85 million	$3.74	22.35

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Eagle Bancorp and ServisFirst Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Bancorp	0	2	0	0	2.00
ServisFirst Bancshares	0	2	0	0	2.00

Eagle Bancorp currently has a consensus target price of $29.50, indicating a potential upside of 16.83%. ServisFirst Bancshares has a consensus target price of $85.00, indicating a potential upside of 1.69%. Given Eagle Bancorp’s higher possible upside, research analysts plainly believe Eagle Bancorp is more favorable than ServisFirst Bancshares.

Summary

ServisFirst Bancshares beats Eagle Bancorp on 9 of the 14 factors compared between the two stocks.

About Eagle Bancorp

Eagle Bancorp, Inc. operates as the bank holding company for EagleBank that provides commercial and consumer banking services primarily in the United States. The company also offers various commercial and consumer lending products comprising commercial loans for working capital, equipment purchases, real estate lines of credit, and government contract financing; asset based lending and accounts receivable financing; construction and commercial real estate loans; business equipment financing; consumer home equity lines of credit, personal lines of credit, and term loans; consumer installment loans, such as auto and personal loans; personal credit cards; and residential mortgage loans. In addition, it provides online and mobile banking services; checking and saving accounts; and other deposit services, including cash management services, business sweep accounts, lock boxes, remote deposit captures, account reconciliation services, merchant card services, safety deposit boxes, and automated clearing house origination, as well as after-hours depositories and ATM services. Further, the company offers insurance products and services through a referral program; and treasury management services. The company serves sole proprietors, small and medium-sized businesses, partnerships, corporations, and non-profit organizations and associations, as well as investors. Eagle Bancorp, Inc. was incorporated in 1997 and is headquartered in Bethesda, Maryland.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.