Financial Analysis: Peoples Financial (OTCMKTS:PFBX) and Southern First Bancshares (NASDAQ:SFST)

Southern First Bancshares (NASDAQ:SFST) and Peoples Financial (OTCMKTS:PFBX) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, dividends, risk, valuation and profitability.

Insider and Institutional Ownership

75.0% of Southern First Bancshares shares are owned by institutional investors. Comparatively, 32.8% of Peoples Financial shares are owned by institutional investors. 7.1% of Southern First Bancshares shares are owned by company insiders. Comparatively, 28.1% of Peoples Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Southern First Bancshares and Peoples Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southern First Bancshares	11.83%	7.63%	0.61%
Peoples Financial	12.85%	4.96%	0.59%

Valuation and Earnings

This table compares Southern First Bancshares and Peoples Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southern First Bancshares	$213.35 million	2.11	$15.53 million	$3.23	17.02
Peoples Financial	$40.11 million	2.33	$21.70 million	$1.02	19.85

Peoples Financial has lower revenue, but higher earnings than Southern First Bancshares. Southern First Bancshares is trading at a lower price-to-earnings ratio than Peoples Financial, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Southern First Bancshares has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500. Comparatively, Peoples Financial has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Southern First Bancshares and Peoples Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southern First Bancshares	0	1	1	1	3.00
Peoples Financial	0	0	0	0	0.00

Southern First Bancshares currently has a consensus price target of $51.00, suggesting a potential downside of 7.22%. Given Southern First Bancshares’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Southern First Bancshares is more favorable than Peoples Financial.

Summary

Southern First Bancshares beats Peoples Financial on 10 of the 15 factors compared between the two stocks.

About Southern First Bancshares

Southern First Bancshares, Inc. operates as the bank holding company for Southern First Bank that provides commercial, consumer, and mortgage loans to the general public in South Carolina, North Carolina, and Georgia. The company accepts various deposit products that include checking accounts, commercial checking accounts, and savings accounts, as well as other time deposits, including daily money market accounts and long-term certificates of deposit. Its loan portfolio comprises commercial real estate loans; construction real estate loans; commercial business loans for various lines of businesses, such as the manufacturing, service industry, and professional service areas; consumer real estate and home equity loans; and other consumer loans, including secured and unsecured installment loans and revolving lines of credit. In addition, the company provides other bank services, such as internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment, and mobile banking services. Southern First Bancshares, Inc. was incorporated in 1999 and is headquartered in Greenville, South Carolina.

About Peoples Financial

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. The company accepts various deposits, such as interest and non-interest-bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). It offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, the company provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, it offers other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and Internet banking services. the company provides services to customers of various industries, such as seafood, retail, hospitality, hotel/motel, gaming, and construction. Peoples Financial Corporation was founded in 1896 and is headquartered in Biloxi, Mississippi.