SB Financial Group (NASDAQ:SBFG) vs. VersaBank (NASDAQ:VBNK) Financial Survey

VersaBank (NASDAQ:VBNK) and SB Financial Group (NASDAQ:SBFG) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.

Institutional & Insider Ownership

56.9% of VersaBank shares are held by institutional investors. Comparatively, 66.7% of SB Financial Group shares are held by institutional investors. 5.3% of VersaBank shares are held by insiders. Comparatively, 5.9% of SB Financial Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for VersaBank and SB Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
VersaBank	0	1	3	0	2.75
SB Financial Group	0	1	1	0	2.50

VersaBank presently has a consensus price target of $24.00, suggesting a potential upside of 4.17%. Given VersaBank’s stronger consensus rating and higher probable upside, research analysts plainly believe VersaBank is more favorable than SB Financial Group.

Dividends

VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.3%. SB Financial Group pays an annual dividend of $0.64 per share and has a dividend yield of 2.1%. VersaBank pays out 9.2% of its earnings in the form of a dividend. SB Financial Group pays out 23.9% 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. SB Financial Group has raised its dividend for 12 consecutive years. SB Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares VersaBank and SB Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
VersaBank	9.92%	8.66%	0.75%
SB Financial Group	17.67%	11.82%	1.07%

Volatility & Risk

VersaBank has a beta of 1.04, suggesting that its stock price is 4% more volatile than the S&P 500. Comparatively, SB Financial Group has a beta of 0.19, suggesting that its stock price is 81% less volatile than the S&P 500.

Earnings and Valuation

This table compares VersaBank and SB Financial Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
VersaBank	$148.71 million	5.03	$20.32 million	$0.76	30.32
SB Financial Group	$68.36 million	2.75	$13.97 million	$2.68	11.22

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

Summary

VersaBank beats SB Financial Group on 9 of the 17 factors compared between the two stocks.

About VersaBank

VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.

About SB Financial Group

SB Financial Group, Inc. operates as the financial holding company for the State Bank and Trust Company that provides a range of commercial banking and wealth management services to individual and corporate customers primarily in Ohio, Indiana, and Michigan. It offers checking, savings, money market accounts, as well as time certificates of deposit; and commercial, consumer, agricultural, and residential mortgage loans. The company also provides automatic teller machine, personal and corporate trust, commercial leasing, bank credit card, safe deposit box rental, internet banking, private client group, and other personalized banking products and services; and various trust and financial services comprising asset management services for individuals and corporate employee benefit plans, as well as brokerage services. In addition, it sells insurance products to retail and commercial customers. The company was formerly known as Rurban Financial Corp. and changed its name to SB Financial Group, Inc. in April 2013. SB Financial Group, Inc. was founded in 1902 and is based in Defiance, Ohio.