Reviewing South Plains Financial (NASDAQ:SPFI) & Truist Financial (NYSE:TFC)

Truist Financial (NYSE:TFC) and South Plains Financial (NASDAQ:SPFI) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Dividends

Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 4.4%. South Plains Financial pays an annual dividend of $0.72 per share and has a dividend yield of 1.7%. Truist Financial pays out 47.7% of its earnings in the form of a dividend. South Plains Financial pays out 19.6% 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. South Plains Financial has raised its dividend for 5 consecutive years.

Institutional & Insider Ownership

71.3% of Truist Financial shares are owned by institutional investors. Comparatively, 54.9% of South Plains Financial shares are owned by institutional investors. 0.2% of Truist Financial shares are owned by insiders. Comparatively, 24.3% of South Plains Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Truist Financial and South Plains Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Truist Financial	2	8	8	0	2.33
South Plains Financial	0	1	6	0	2.86

Truist Financial presently has a consensus target price of $55.44, indicating a potential upside of 17.72%. South Plains Financial has a consensus target price of $49.60, indicating a potential upside of 17.20%. Given Truist Financial’s higher possible upside, equities research analysts clearly believe Truist Financial is more favorable than South Plains Financial.

Risk & Volatility

Truist Financial has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, South Plains Financial has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500.

Profitability

This table compares Truist Financial and South Plains Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Truist Financial	19.13%	10.06%	1.09%
South Plains Financial	20.79%	12.36%	1.37%

Valuation and Earnings

This table compares Truist Financial and South Plains Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Truist Financial	$30.44 billion	1.89	$5.31 billion	$4.36	10.80
South Plains Financial	$296.89 million	2.69	$58.47 million	$3.67	11.53

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

Summary

South Plains Financial beats Truist Financial on 9 of the 17 factors compared between the two stocks.

About Truist Financial

Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.