Financial Comparison: 1st Source (NASDAQ:SRCE) vs. Southern States Bancshares (NASDAQ:SSBK)

1st Source (NASDAQ:SRCE) and Southern States Bancshares (NASDAQ:SSBK) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Earnings and Valuation

This table compares 1st Source and Southern States Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
1st Source	$376.44 million	3.74	$124.93 million	$4.97	11.56
Southern States Bancshares	$94.58 million	2.93	$31.95 million	$3.60	8.63

1st Source has higher revenue and earnings than Southern States Bancshares. Southern States Bancshares is trading at a lower price-to-earnings ratio than 1st Source, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 1st Source and Southern States Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
1st Source	23.23%	12.02%	1.47%
Southern States Bancshares	19.33%	14.88%	1.32%

Volatility & Risk

1st Source has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Southern States Bancshares has a beta of 0.21, indicating that its share price is 79% less volatile than the S&P 500.

Dividends

1st Source pays an annual dividend of $1.44 per share and has a dividend yield of 2.5%. Southern States Bancshares pays an annual dividend of $0.36 per share and has a dividend yield of 1.2%. 1st Source pays out 29.0% of its earnings in the form of a dividend. Southern States Bancshares pays out 10.0% 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. 1st Source has raised its dividend for 37 consecutive years. 1st Source is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for 1st Source and Southern States Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
1st Source	0	2	0	0	2.00
Southern States Bancshares	0	0	2	0	3.00

1st Source presently has a consensus price target of $64.75, suggesting a potential upside of 12.67%. Southern States Bancshares has a consensus price target of $35.50, suggesting a potential upside of 14.26%. Given Southern States Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Southern States Bancshares is more favorable than 1st Source.

Insider and Institutional Ownership

74.4% of 1st Source shares are owned by institutional investors. Comparatively, 58.7% of Southern States Bancshares shares are owned by institutional investors. 19.3% of 1st Source shares are owned by insiders. Comparatively, 14.8% of Southern States Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

1st Source beats Southern States Bancshares on 12 of the 17 factors compared between the two stocks.

About 1st Source

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and wealth advisory services, and insurance products to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate mortgage loans, and home equity lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and renewable energy and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for construction equipment, new and pre-owned aircraft, auto and light trucks, and medium and heavy duty trucks; and finances construction equipment, aircrafts, medium and heavy duty trucks, step vans, vocational work trucks, motor coaches, shuttle buses, funeral cars, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.

About Southern States Bancshares

Southern States Bancshares, Inc. operates as the bank holding company for Southern States Bank that provides community banking services to businesses and individuals. The company provides various deposit products, such as savings, money market, and noninterest-bearing demand accounts; certificates of deposit; and time deposits. It offers real estate loan products, including loans for real estate construction and development, residential mortgages, and commercial real estate mortgage loans; commercial and industrial loans; and direct consumer installment loans, overdrafts, and other revolving credit loans. In addition, it offers online and mobile banking, and ATM services. Southern States Bancshares, Inc. was founded in 2007 and is headquartered in Anniston, Alabama.