National Bankshares (NASDAQ:NKSH – Get Free Report) and Stock Yards Bancorp (NASDAQ:SYBT – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, analyst recommendations, valuation, risk and dividends.
Profitability
This table compares National Bankshares and Stock Yards Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| National Bankshares | 20.39% | 10.38% | 1.03% |
| Stock Yards Bancorp | 25.06% | 13.58% | 1.53% |
Dividends
National Bankshares pays an annual dividend of $1.50 per share and has a dividend yield of 4.3%. Stock Yards Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 1.8%. National Bankshares pays out 54.5% of its earnings in the form of a dividend. Stock Yards Bancorp pays out 26.3% 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. Stock Yards Bancorp has increased its dividend for 15 consecutive years.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| National Bankshares | 0 | 1 | 0 | 1 | 3.00 |
| Stock Yards Bancorp | 0 | 4 | 2 | 0 | 2.33 |
Stock Yards Bancorp has a consensus price target of $76.00, suggesting a potential upside of 5.63%. Given Stock Yards Bancorp’s higher probable upside, analysts clearly believe Stock Yards Bancorp is more favorable than National Bankshares.
Insider & Institutional Ownership
29.7% of National Bankshares shares are owned by institutional investors. Comparatively, 56.5% of Stock Yards Bancorp shares are owned by institutional investors. 3.3% of National Bankshares shares are owned by insiders. Comparatively, 2.9% of Stock Yards Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Risk and Volatility
National Bankshares has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, Stock Yards Bancorp has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.
Earnings and Valuation
This table compares National Bankshares and Stock Yards Bancorp”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| National Bankshares | $85.32 million | 2.62 | $15.83 million | $2.75 | 12.74 |
| Stock Yards Bancorp | $564.54 million | 3.76 | $140.15 million | $4.86 | 14.80 |
Stock Yards Bancorp has higher revenue and earnings than National Bankshares. National Bankshares is trading at a lower price-to-earnings ratio than Stock Yards Bancorp, indicating that it is currently the more affordable of the two stocks.
Summary
Stock Yards Bancorp beats National Bankshares on 14 of the 18 factors compared between the two stocks.
About National Bankshares
National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.
About Stock Yards Bancorp
Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.
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