Sturgis Bancorp (OTCMKTS:STBI) versus ServisFirst Bancshares (NYSE:SFBS) Financial Contrast

Sturgis Bancorp (OTCMKTS:STBI) and ServisFirst Bancshares (NYSE:SFBS) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Earnings and Valuation

This table compares Sturgis Bancorp and ServisFirst Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sturgis Bancorp	$59.13 million	0.94	$7.46 million	$3.66	7.04
ServisFirst Bancshares	$1.02 billion	4.19	$276.60 million	$5.42	14.40

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

Dividends

Sturgis Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 2.8%. ServisFirst Bancshares pays an annual dividend of $1.52 per share and has a dividend yield of 1.9%. Sturgis Bancorp pays out 19.7% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 28.0% 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. ServisFirst Bancshares has raised its dividend for 10 consecutive years. Sturgis Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Sturgis Bancorp has a beta of 0.18, suggesting that its share price is 82% less volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Institutional & Insider Ownership

67.3% of ServisFirst Bancshares shares are held by institutional investors. 16.0% of Sturgis Bancorp shares are held by insiders. Comparatively, 6.5% of ServisFirst Bancshares shares are held by 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 Sturgis Bancorp and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sturgis Bancorp	13.20%	N/A	N/A
ServisFirst Bancshares	28.80%	16.95%	1.74%

Analyst Recommendations

This is a summary of current recommendations and price targets for Sturgis Bancorp and ServisFirst Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sturgis Bancorp	0	0	0	0	0.00
ServisFirst Bancshares	0	2	2	1	2.80

ServisFirst Bancshares has a consensus price target of $94.33, indicating a potential upside of 20.85%. Given ServisFirst Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe ServisFirst Bancshares is more favorable than Sturgis Bancorp.

Summary

ServisFirst Bancshares beats Sturgis Bancorp on 15 of the 18 factors compared between the two stocks.

About Sturgis Bancorp

Sturgis Bancorp, Inc. operates as the bank holding company for Sturgis Bank & Trust Company that provides banking products and services in Michigan, the United States. The company offers checking, savings and health savings, and money market accounts; and certificates of deposit and individual retirement accounts. It also provides mortgage, automobile, savings secured, personal, home equity, equipment and machinery, government supported, and commercial real estate loans, as well as home equity lines of credit and business lines of credit; and credit cards. In addition, the company offers private banking, cashier checks, wire transfers, foreign drafts and foreign currency, overdraft protection, night depository, and notary services, as well as safe deposit boxes and residential mortgages. Further, it provides direct deposit, remote deposit capture, Visa check card, and checks reorder services; and investment and financial-advisory services, as well as commercial and consumer insurance and title insurance products. Additionally, the company offers estate and asset management services, such as estate settlements, trust administration, record keeping, investment management, and custody services; cash and treasury management; and online and mobile banking, bill pay, and mobile wallet services. It operates through 14 bank facilities and 4 full service standalone ATMs located in 12 communities in Michigan. Sturgis Bancorp, Inc. was founded in 1905 and is headquartered in Sturgis, Michigan.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.