Analyzing Renasant (NASDAQ:RNST) and Investar (NASDAQ:ISTR)

Renasant (NASDAQ:RNST) and Investar (NASDAQ:ISTR) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Volatility & Risk

Renasant has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Investar has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Profitability

This table compares Renasant and Investar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Renasant	15.04%	6.98%	0.93%
Investar	10.04%	6.69%	0.53%

Earnings and Valuation

This table compares Renasant and Investar”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Renasant	$639.68 million	2.82	$144.68 million	$2.46	13.02
Investar	$79.24 million	2.41	$16.68 million	$1.79	10.85

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

Insider & Institutional Ownership

77.3% of Renasant shares are owned by institutional investors. Comparatively, 50.2% of Investar shares are owned by institutional investors. 2.8% of Renasant shares are owned by company insiders. Comparatively, 8.7% of Investar shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Renasant pays an annual dividend of $0.88 per share and has a dividend yield of 2.7%. Investar pays an annual dividend of $0.42 per share and has a dividend yield of 2.2%. Renasant pays out 35.8% of its earnings in the form of a dividend. Investar pays out 23.5% 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.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Renasant and Investar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Renasant	0	1	5	0	2.83
Investar	0	0	2	0	3.00

Renasant presently has a consensus price target of $39.33, indicating a potential upside of 22.80%. Investar has a consensus price target of $16.75, indicating a potential downside of 13.79%. Given Renasant’s higher possible upside, analysts clearly believe Renasant is more favorable than Investar.

Summary

Renasant beats Investar on 13 of the 16 factors compared between the two stocks.

About Renasant

Renasant Corporation operates as a bank holding company for Renasant Bank that provides a range of financial, wealth management, fiduciary, and insurance services to retail and commercial customers. The company operates through Community Banks, Insurance, and Wealth Management segments. The Community Banks segment offers checking and savings accounts, business and personal loans, asset-based lending, and factoring equipment leasing services, as well as safe deposit and night depository facilities. It also provides commercial, financial, and agricultural loans; equipment financing and leasing; real estate1-4 family mortgage; real estatecommercial mortgage; real estateconstruction loans for the construction of single family residential properties, multi-family properties, and commercial projects; installment loans to individuals; and interim construction loans, as well as automated teller machine (ATM), online and mobile banking, call center, and treasury management services. The Insurance segment provides insurance agency services, such as commercial and personal insurance products through insurance carriers. The Wealth Management segment offers a range of wealth management and fiduciary services, including administration and management of trust accounts, such as personal and corporate benefit accounts, and custodial accounts, as well as accounting and money management for trust accounts; annuities, mutual funds, and other investment services through a third party broker-dealer; administrative and compliance services; and qualified retirement plans, IRAs, employee benefit plans, personal trusts, and estates. Renasant Corporation was founded in 1904 and is headquartered in Tupelo, Mississippi.

About Investar

Investar Holding Corporation operates as the bank holding company for Investar Bank that provides a range of commercial banking products to individuals, professionals, and small to medium-sized businesses in south Louisiana, southeast Texas, and Alabama in the United States. The company offers various deposit products and services, such as savings, checking, money market, and individual retirement accounts, as well as various certificates of deposit; debit and credit cards; internet, mobile, and video banking services; and reciprocal deposit products. It also provides commercial real estate loans; commercial and industrial loans, including working capital lines of credit and equipment loans; loans for the construction of commercial projects, and single family residential and multifamily properties; one-to-four family residential real estate loans, such as second mortgage loans; and consumer loans, such as secured and unsecured installment and term loans, home equity loans and lines of credit, and auto loans, as well as loans for personal, family, and household purposes. In addition, the company offers treasury management products, including remote deposit capture, lockbox payment processing, virtual vault, positive pay, ACH origination, wire transfer, investment sweep accounts, and business internet banking services. Further, it provides various other banking services, such as cashiers' checks, direct deposit of payroll and social security checks, night depository, bank-by-mail, automated teller machines, electronic statements, interactive teller machines, online account opening, and mobile wallet payment services. Investar Holding Corporation was founded in 2006 and is headquartered in Baton Rouge, Louisiana.