Critical Survey: Stock Yards Bancorp (NASDAQ:SYBT) vs. Prosperity Bancshares (NYSE:PB)

Stock Yards Bancorp (NASDAQ:SYBTGet Free Report) and Prosperity Bancshares (NYSE:PBGet Free Report) are both mid-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitability, risk, valuation, institutional ownership and dividends.

Insider and Institutional Ownership

56.5% of Stock Yards Bancorp shares are held by institutional investors. Comparatively, 80.7% of Prosperity Bancshares shares are held by institutional investors. 3.4% of Stock Yards Bancorp shares are held by company insiders. Comparatively, 4.2% of Prosperity Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Stock Yards Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 1.7%. Prosperity Bancshares pays an annual dividend of $2.32 per share and has a dividend yield of 3.3%. Stock Yards Bancorp pays out 30.0% of its earnings in the form of a dividend. Prosperity Bancshares pays out 44.2% 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 and Prosperity Bancshares has increased its dividend for 27 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Stock Yards Bancorp and Prosperity Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stock Yards Bancorp 22.54% 12.71% 1.38%
Prosperity Bancshares 26.79% 6.64% 1.22%

Valuation & Earnings

This table compares Stock Yards Bancorp and Prosperity Bancshares”s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stock Yards Bancorp $355.24 million 6.15 $114.54 million $4.14 17.90
Prosperity Bancshares $1.17 billion 5.66 $479.39 million $5.25 13.29

Prosperity Bancshares has higher revenue and earnings than Stock Yards Bancorp. Prosperity Bancshares 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.

Volatility and Risk

Stock Yards Bancorp has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Prosperity Bancshares has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Stock Yards Bancorp and Prosperity Bancshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stock Yards Bancorp 0 4 0 0 2.00
Prosperity Bancshares 0 6 10 0 2.63

Stock Yards Bancorp currently has a consensus price target of $77.25, indicating a potential upside of 4.27%. Prosperity Bancshares has a consensus price target of $83.80, indicating a potential upside of 20.09%. Given Prosperity Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Prosperity Bancshares is more favorable than Stock Yards Bancorp.

Summary

Prosperity Bancshares beats Stock Yards Bancorp on 11 of the 17 factors compared between the two stocks.

About Stock Yards Bancorp

(Get Free Report)

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.

About Prosperity Bancshares

(Get Free Report)

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.

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