Texas Community Bancshares (NASDAQ:TCBS – Get Free Report) and Five Star Bancorp (NASDAQ:FSBC – Get Free Report) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.
Dividends
Texas Community Bancshares pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Five Star Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Texas Community Bancshares pays out 19.8% of its earnings in the form of a dividend. Five Star Bancorp pays out 29.6% 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. Texas Community Bancshares has increased its dividend for 1 consecutive years.
Earnings and Valuation
This table compares Texas Community Bancshares and Five Star Bancorp”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Texas Community Bancshares | $25.57 million | 1.95 | $2.84 million | $1.21 | 14.38 |
| Five Star Bancorp | $255.47 million | 4.44 | $61.61 million | $3.38 | 13.68 |
Five Star Bancorp has higher revenue and earnings than Texas Community Bancshares. Five Star Bancorp is trading at a lower price-to-earnings ratio than Texas Community Bancshares, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Texas Community Bancshares and Five Star Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Texas Community Bancshares | 12.68% | 6.14% | 0.76% |
| Five Star Bancorp | 25.92% | 15.92% | 1.45% |
Risk & Volatility
Texas Community Bancshares has a beta of -0.03, indicating that its share price is 103% less volatile than the S&P 500. Comparatively, Five Star Bancorp has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current recommendations for Texas Community Bancshares and Five Star Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Texas Community Bancshares | 0 | 1 | 0 | 0 | 2.00 |
| Five Star Bancorp | 0 | 3 | 4 | 0 | 2.57 |
Five Star Bancorp has a consensus target price of $45.20, indicating a potential downside of 2.23%. Given Five Star Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Five Star Bancorp is more favorable than Texas Community Bancshares.
Insider & Institutional Ownership
15.8% of Texas Community Bancshares shares are owned by institutional investors. Comparatively, 46.9% of Five Star Bancorp shares are owned by institutional investors. 15.3% of Texas Community Bancshares shares are owned by company insiders. Comparatively, 21.8% of Five Star Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Five Star Bancorp beats Texas Community Bancshares on 14 of the 17 factors compared between the two stocks.
About Texas Community Bancshares
Texas Community Bancshares, Inc. operates as the bank holding company for Mineola Community Bank, S.S.B. that provides loans and banking services to consumers and commercial customers in Mineola, Texas and the surrounding area, and the Dallas Fort Worth Metroplex. It generates a selection of deposit accounts, including savings accounts, checking accounts, certificates of deposit, and individual retirement accounts. The company also originates primarily one- to four-family residential mortgage loans, commercial real estate loans, and construction and land loans; and car, boat, share, unsecured loans, etc., as well as agricultural loans, commercial loans, and consumer and other loans. In addition, it invests in securities; and offers sweep account, safe deposit boxes, e-statement, cards, online banking, and mobile banking services. Texas Community Bancshares, Inc. was founded in 1934 and is headquartered in Mineola, Texas.
About Five Star Bancorp
Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.
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