Critical Review: Origin Bancorp (TXSE:OBK) and Southside Bancshares (NYSE:SBSI)

Southside Bancshares (NYSE:SBSI) and Origin Bancorp (TXSE:OBK) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Earnings & Valuation

This table compares Southside Bancshares and Origin Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southside Bancshares	$419.03 million	2.49	$69.18 million	$3.31	10.57
Origin Bancorp	$420.91 million	3.93	$75.20 million	$4.15	12.92

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

Insider and Institutional Ownership

55.7% of Southside Bancshares shares are owned by institutional investors. Comparatively, 54.7% of Origin Bancorp shares are owned by institutional investors. 5.1% of Southside Bancshares shares are owned by insiders. Comparatively, 5.3% of Origin Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Southside Bancshares has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Origin Bancorp has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Profitability

This table compares Southside Bancshares and Origin Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southside Bancshares	21.48%	11.58%	1.14%
Origin Bancorp	16.26%	7.97%	1.00%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Southside Bancshares and Origin Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southside Bancshares	0	4	1	1	2.50
Origin Bancorp	0	3	5	0	2.62

Southside Bancshares presently has a consensus target price of $34.75, indicating a potential downside of 0.66%. Origin Bancorp has a consensus target price of $58.00, indicating a potential upside of 8.19%. Given Origin Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Origin Bancorp is more favorable than Southside Bancshares.

Dividends

Southside Bancshares pays an annual dividend of $1.48 per share and has a dividend yield of 4.2%. Origin Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.1%. Southside Bancshares pays out 44.7% of its earnings in the form of a dividend. Origin Bancorp pays out 27.0% 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. Southside Bancshares has raised its dividend for 30 consecutive years and Origin Bancorp has raised its dividend for 4 consecutive years. Southside Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Origin Bancorp beats Southside Bancshares on 11 of the 18 factors compared between the two stocks.

About Southside Bancshares

Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposit. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration, revocable and testamentary trusts, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. As of December 31, 2021, the company operated through 56 banking facilities and 73 ATMs/ITMs. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.

About Origin Bancorp

Origin Bancorp, Inc. operates as a bank holding company for Origin Bank that provides banking and financial services to small and medium-sized businesses, municipalities, high net worth individuals, and retail clients in Texas, Louisiana, and Mississippi. It offers noninterest and interest-bearing checking accounts, savings deposits, money market accounts, and time deposits; and offers commercial real estate, construction and land development, consumer, residential real estate, commercial and industrial, mortgage warehouse, residential mortgage, and paycheck protection program loans. The company also offers personal and commercial property, and casualty insurance products; and Internet banking and voice response information, mobile applications, cash management, overdraft protection, direct deposit, safe deposit box, U.S. savings bonds, and automatic account transfer services; and treasury management, mortgage origination and servicing facilities, peer-to-peer electronic pay solutions, and personal financial management solutions. As of December 31, 2021, it operated 44 banking centers. The company was founded in 1912 and is headquartered in Ruston, Louisiana.