Northpointe Bancshares (NYSE:NPB) and Southern Missouri Bancorp (NASDAQ:SMBC) Critical Analysis

Southern Missouri Bancorp (NASDAQ:SMBC) and Northpointe Bancshares (NYSE:NPB) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.

Analyst Ratings

This is a summary of current recommendations and price targets for Southern Missouri Bancorp and Northpointe Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern Missouri Bancorp	0	2	2	0	2.50
Northpointe Bancshares	1	2	1	0	2.00

Southern Missouri Bancorp currently has a consensus target price of $73.33, suggesting a potential downside of 5.72%. Northpointe Bancshares has a consensus target price of $19.83, suggesting a potential upside of 3.73%. Given Northpointe Bancshares’ higher probable upside, analysts plainly believe Northpointe Bancshares is more favorable than Southern Missouri Bancorp.

Institutional and Insider Ownership

49.5% of Southern Missouri Bancorp shares are held by institutional investors. 15.8% of Southern Missouri Bancorp shares are held by insiders. Comparatively, 18.3% of Northpointe Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Southern Missouri Bancorp and Northpointe Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern Missouri Bancorp	$305.35 million	2.81	$58.58 million	$5.99	12.98
Northpointe Bancshares	$471.18 million	1.40	$83.41 million	$2.22	8.61

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

Dividends

Southern Missouri Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 1.3%. Northpointe Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.5%. Southern Missouri Bancorp pays out 16.7% of its earnings in the form of a dividend. Northpointe Bancshares pays out 4.5% 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. Southern Missouri Bancorp has raised its dividend for 13 consecutive years. Southern Missouri Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Southern Missouri Bancorp and Northpointe Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern Missouri Bancorp	21.36%	12.05%	1.33%
Northpointe Bancshares	17.92%	14.80%	1.28%

Summary

Southern Missouri Bancorp beats Northpointe Bancshares on 10 of the 16 factors compared between the two stocks.

About Southern Missouri Bancorp

Southern Missouri Bancorp, Inc. operates as the bank holding company for Southern Bank that provides banking and financial services to individuals and corporate customers in the United States. The company offers deposits products, including interest-bearing and noninterest-bearing transaction accounts, saving accounts, certificates of deposit, retirement savings plans, and money market deposit accounts. It also provides loans, such as residential mortgage, commercial real estate, construction, and commercial business loans; and consumer loans comprising home equity, direct and indirect automobile loans, second mortgages, mobile home loans, and loans secured by deposits. In addition, the company offers fiduciary and investment management services; commercial and consumer insurance; online and mobile banking services; and debit or credit cards. The company was founded in 1887 and is headquartered in Poplar Bluff, Missouri.

About Northpointe Bancshares

Northpointe Bancshares, Inc. operates as a bank holding company. It offers a nationwide mortgage purchase program, residential mortgage loans, digital deposit banking to retail customers and custodial deposit services. The company was founded by Charles A. Williams in 1998 and is headquartered in Grand Rapids, MI.