Contrasting SmartFinancial (NASDAQ:SMBK) and Nicolet Bankshares (NYSE:NIC)

SmartFinancial (NASDAQ:SMBK) and Nicolet Bankshares (NYSE:NIC) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.

Dividends

SmartFinancial pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Nicolet Bankshares pays an annual dividend of $1.00 per share and has a dividend yield of 1.2%. SmartFinancial pays out 20.5% of its earnings in the form of a dividend. Nicolet Bankshares pays out 15.4% 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.

Valuation and Earnings

This table compares SmartFinancial and Nicolet Bankshares’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SmartFinancial	$240.37 million	1.48	$28.59 million	$1.56	13.41
Nicolet Bankshares	$418.83 million	2.89	$61.52 million	$6.49	12.57

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for SmartFinancial and Nicolet Bankshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SmartFinancial	0	2	2	1	2.80
Nicolet Bankshares	0	3	1	0	2.25

SmartFinancial presently has a consensus price target of $25.40, suggesting a potential upside of 21.41%. Nicolet Bankshares has a consensus price target of $87.88, suggesting a potential upside of 7.69%. Given SmartFinancial’s stronger consensus rating and higher possible upside, research analysts clearly believe SmartFinancial is more favorable than Nicolet Bankshares.

Volatility & Risk

SmartFinancial has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Nicolet Bankshares has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Institutional & Insider Ownership

58.8% of SmartFinancial shares are owned by institutional investors. Comparatively, 43.1% of Nicolet Bankshares shares are owned by institutional investors. 7.8% of SmartFinancial shares are owned by insiders. Comparatively, 16.4% of Nicolet Bankshares shares are owned 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SmartFinancial	10.65%	6.94%	0.65%
Nicolet Bankshares	20.60%	10.07%	1.19%

Summary

Nicolet Bankshares beats SmartFinancial on 11 of the 17 factors compared between the two stocks.

About SmartFinancial

SmartFinancial, Inc. operates as the bank holding company for SmartBank that provides various financial services to individuals and corporate customers in Tennessee, Alabama, and Florida. It operates through Commercial Real Estate, Consumer Real Estate, Construction and Land Development, Commercial and Industrial, Leases, and Consumer and Other segments. The company offers noninterest-bearing and interest-bearing checking, interest-bearing demand, savings, money market, time deposit, individual retirement accounts, as well as certificates of deposit. It also provides commercial and residential real estate, consumer real estate, and construction and land development loans; commercial and financial loans and leases; commercial business and mortgage loans; and direct consumer installment, educational, agriculture, and other revolving credit loans; equipment financing, heavy equipment, semis, and trailers loans and leases to small and mid-size companies; letters of credit; and overdraft facilities. In addition, the company offers wealth management, insurance, mortgage origination, and internet and mobile banking services. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.

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.