Financial Review: Atlantic Union Bankshares (NASDAQ:AUB) & Southside Bancshares (NASDAQ:SBSI)

Atlantic Union Bankshares (NASDAQ:AUB) and Southside Bancshares (NASDAQ:SBSI) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Atlantic Union Bankshares and Southside Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atlantic Union Bankshares	0	1	4	0	2.80
Southside Bancshares	0	1	0	0	2.00

Atlantic Union Bankshares currently has a consensus price target of $40.20, suggesting a potential upside of 9.90%. Southside Bancshares has a consensus price target of $37.00, suggesting a potential upside of 17.42%. Given Southside Bancshares’ higher possible upside, analysts plainly believe Southside Bancshares is more favorable than Atlantic Union Bankshares.

Volatility and Risk

Atlantic Union Bankshares has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500.

Dividends

Atlantic Union Bankshares pays an annual dividend of $1.28 per share and has a dividend yield of 3.5%. Southside Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 4.6%. Atlantic Union Bankshares pays out 47.1% of its earnings in the form of a dividend. Southside Bancshares pays out 53.5% 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. Atlantic Union Bankshares has raised its dividend for 13 consecutive years and Southside Bancshares has raised 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.

Profitability

This table compares Atlantic Union Bankshares and Southside Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atlantic Union Bankshares	15.53%	8.95%	1.07%
Southside Bancshares	18.90%	10.64%	1.00%

Insider and Institutional Ownership

78.6% of Atlantic Union Bankshares shares are held by institutional investors. Comparatively, 55.7% of Southside Bancshares shares are held by institutional investors. 0.9% of Atlantic Union Bankshares shares are held by insiders. Comparatively, 5.9% of Southside Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Atlantic Union Bankshares and Southside Bancshares’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atlantic Union Bankshares	$739.22 million	4.44	$201.82 million	$2.72	13.45
Southside Bancshares	$395.58 million	2.41	$86.69 million	$2.69	11.71

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

Summary

Atlantic Union Bankshares beats Southside Bancshares on 11 of the 17 factors compared between the two stocks.

About Atlantic Union Bankshares

Atlantic Union Bankshares Corporation operates as the bank holding company for Atlantic Union Bank that provides banking and related financial products and services to consumers and businesses in the United States. It operates in two segments, Wholesale Banking and Consumer Banking. The company accepts various deposit products, including checking, savings, time deposit, and money market accounts; certificates of deposit; and other depository services. It also provides loans for commercial, industrial, residential mortgage, and consumer purposes, as well as debit and credit cards. In addition, it provides treasury management and capital market, wealth management, private banking, trust, financial and retirement planning, brokerage, investment management, equipment finance, mortgage banking, and insurance products and services. The company offers products and services through full-service branches and ATMs, as well as through its mobile and internet banking. The company was formerly known as Union Bankshares Corporation and changed its name to Atlantic Union Bankshares Corporation in May 2019. Atlantic Union Bankshares Corporation was founded in 1902 and is headquartered in Glen Allen, Virginia.

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.