Lakeland Financial (NASDAQ:LKFN – Get Free Report) and Enterprise Financial Services (NASDAQ:EFSC – Get Free Report) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.
Valuation and Earnings
This table compares Lakeland Financial and Enterprise Financial Services”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lakeland Financial | $262.76 million | 5.67 | $93.48 million | $3.79 | 15.39 |
| Enterprise Financial Services | $593.12 million | 3.31 | $185.27 million | $5.14 | 10.31 |
Risk and Volatility
Lakeland Financial has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Enterprise Financial Services has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.
Institutional & Insider Ownership
81.2% of Lakeland Financial shares are held by institutional investors. Comparatively, 72.2% of Enterprise Financial Services shares are held by institutional investors. 3.0% of Lakeland Financial shares are held by company insiders. Comparatively, 2.3% of Enterprise Financial Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Dividends
Lakeland Financial pays an annual dividend of $2.00 per share and has a dividend yield of 3.4%. Enterprise Financial Services pays an annual dividend of $1.28 per share and has a dividend yield of 2.4%. Lakeland Financial pays out 52.8% of its earnings in the form of a dividend. Enterprise Financial Services pays out 24.9% 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. Lakeland Financial has increased its dividend for 14 consecutive years and Enterprise Financial Services has increased its dividend for 11 consecutive years. Lakeland Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Lakeland Financial and Enterprise Financial Services’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lakeland Financial | 23.23% | 13.77% | 1.43% |
| Enterprise Financial Services | 19.98% | 10.98% | 1.25% |
Analyst Ratings
This is a summary of recent ratings for Lakeland Financial and Enterprise Financial Services, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lakeland Financial | 0 | 2 | 2 | 0 | 2.50 |
| Enterprise Financial Services | 0 | 1 | 3 | 0 | 2.75 |
Lakeland Financial presently has a consensus target price of $68.67, indicating a potential upside of 17.72%. Enterprise Financial Services has a consensus target price of $65.67, indicating a potential upside of 23.95%. Given Enterprise Financial Services’ stronger consensus rating and higher probable upside, analysts clearly believe Enterprise Financial Services is more favorable than Lakeland Financial.
Summary
Lakeland Financial beats Enterprise Financial Services on 9 of the 17 factors compared between the two stocks.
About Lakeland Financial
Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services in the United States. The company accepts various deposit products, such as noninterest bearing, interest-bearing checking, savings, money market, NOW, and demand deposits. Its loan products include commercial and industrial, commercial real estate and multi-family residential, construction, agri-business and agricultural, consumer 1-4 family mortgage, and other commercial and consumer loans. The company also provides retail and merchant credit card services; corporate treasury management, wealth advisory, and trust services; retail brokerage services, including various financial and investment products, such as annuities and life insurance; and mobile business banking and on-line treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. The company was founded in 1872 and is headquartered in Warsaw, Indiana.
About Enterprise Financial Services
Enterprise Financial Services Corp operates as the holding company for Enterprise Bank & Trust that offers banking and wealth management services to individuals and corporate customers primarily in Arizona, California, Florida, Kansas, Missouri, Nevada, and New Mexico. It provides checking, savings, money market accounts, and certificates of deposit. The company also provides commercial and industrial, commercial real estate, real estate construction and development, residential real estate, small business administration, agricultural, consumer, and other loan products. In addition, it offers treasury management and international trade services; tax credit brokerage services; life insurance premium and sponsor finance; tax credit related lending; other deposit accounts, such as community associations, property management, third party escrow, and trust services; treasury management product and services; customized solutions and products; cash management; fiduciary, investment management, and financial advisory services; and customer hedging products, including international banking, card services, and tax credit businesses. Further, the company provides online, device applications, text, and voice banking; remote deposit capture; internet banking, mobile banking, cash management, positive pay services, fraud detection and prevention, automated payables, check image, and statement and document imaging; and controlled disbursements, repurchase agreements, and sweep investment accounts. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.
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