Head-To-Head Review: QCR (NASDAQ:QCRH) versus ServisFirst Bancshares (NASDAQ:SFBS)

QCR (NASDAQ:QCRH) and ServisFirst Bancshares (NASDAQ:SFBS) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Profitability

This table compares QCR and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QCR	20.80%	13.78%	1.38%
ServisFirst Bancshares	22.31%	14.84%	1.32%

Dividends

QCR pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. ServisFirst Bancshares pays an annual dividend of $1.20 per share and has a dividend yield of 1.9%. QCR pays out 3.6% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 32.9% 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. ServisFirst Bancshares has increased its dividend for 9 consecutive years. ServisFirst Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations for QCR and ServisFirst Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QCR	0	0	3	0	3.00
ServisFirst Bancshares	0	1	0	0	2.00

QCR currently has a consensus price target of $72.00, suggesting a potential upside of 22.93%. ServisFirst Bancshares has a consensus price target of $64.00, suggesting a potential upside of 1.52%. Given QCR’s stronger consensus rating and higher probable upside, research analysts plainly believe QCR is more favorable than ServisFirst Bancshares.

Valuation and Earnings

This table compares QCR and ServisFirst Bancshares’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QCR	$546.09 million	1.80	$113.56 million	$6.73	8.70
ServisFirst Bancshares	$843.66 million	4.07	$206.85 million	$3.65	17.27

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

Volatility & Risk

QCR has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500.

Institutional & Insider Ownership

70.0% of QCR shares are held by institutional investors. Comparatively, 67.3% of ServisFirst Bancshares shares are held by institutional investors. 3.7% of QCR shares are held by insiders. Comparatively, 7.4% of ServisFirst Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

ServisFirst Bancshares beats QCR on 9 of the 17 factors compared between the two stocks.

About QCR

QCR Holdings, Inc., a multi-bank holding company, provides commercial and consumer banking, and trust and asset management services. The company's deposit products include noninterest-bearing demand, interest-bearing demand, time, and brokered deposits. It also provides various commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals, and government agencies. The company's loan portfolio comprises loans to small and mid-sized businesses; business loans, including lines of credit for working capital and operational purposes; term loans for the acquisition of facilities, equipment, and other purposes; commercial and residential real estate loans; and installment and other consumer loans, such as home improvement, home equity, motor vehicle, and signature loans, as well as small personal credit lines. In addition, it engages in leasing of machinery and equipment to commercial and industrial businesses under direct financing lease contracts; and issuance of trust preferred securities. QCR Holdings, Inc. was incorporated in 1993 and is headquartered in Moline, Illinois.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.