Southside Bancshares (NASDAQ:SBSI) vs. Commerce Bancshares (NASDAQ:CBSH) Financial Survey

Southside Bancshares (NASDAQ:SBSI) and Commerce Bancshares (NASDAQ:CBSH) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Volatility & Risk

Southside Bancshares has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Commerce Bancshares has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Valuation and Earnings

This table compares Southside Bancshares and Commerce Bancshares’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southside Bancshares $283.15 million 4.79 $74.55 million $2.20 18.77
Commerce Bancshares $1.45 billion 6.43 $421.23 million $3.41 23.35

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

Institutional & Insider Ownership

48.1% of Southside Bancshares shares are held by institutional investors. Comparatively, 62.9% of Commerce Bancshares shares are held by institutional investors. 5.2% of Southside Bancshares shares are held by company insiders. Comparatively, 3.4% of Commerce Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Southside Bancshares and Commerce Bancshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southside Bancshares 0 2 0 0 2.00
Commerce Bancshares 2 2 0 0 1.50

Southside Bancshares presently has a consensus target price of $29.50, suggesting a potential downside of 28.57%. Commerce Bancshares has a consensus target price of $68.00, suggesting a potential downside of 14.62%. Given Commerce Bancshares’ higher possible upside, analysts clearly believe Commerce Bancshares is more favorable than Southside Bancshares.

Dividends

Southside Bancshares pays an annual dividend of $1.28 per share and has a dividend yield of 3.1%. Commerce Bancshares pays an annual dividend of $1.05 per share and has a dividend yield of 1.3%. Southside Bancshares pays out 58.2% of its earnings in the form of a dividend. Commerce Bancshares pays out 30.8% 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 5 consecutive years and Commerce Bancshares has raised its dividend for 1 consecutive years. Southside Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Southside Bancshares and Commerce Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southside Bancshares 24.55% 8.68% 0.99%
Commerce Bancshares 23.67% 10.49% 1.15%

Summary

Commerce Bancshares beats Southside Bancshares on 11 of the 16 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, 2020, the company operated through 57 banking facilities and 79 ATMs/ITMs. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.

About Commerce Bancshares

Commerce Bancshares, Inc. operates as a bank holding company for Commerce Bank. It provides general banking services, such as retail, corporate, investment, trust, and asset management products and services to individuals and businesses. The firm operates through the following business segments: Consumer, Commercial and Wealth. The Consumer segment includes the retail branch network, consumer installment lending, personal mortgage banking, and debit & credit bank card activities. The Commercial segment provides corporate lending, including the small business banking product line within the branch network, leasing, international services, and business, government deposit, and related commercial cash management services, as well as merchant and commercial bank card products. The Wealth segment provides traditional trust and estate tax planning, advisory and discretionary investment management and brokerage services. The company was founded on August 4, 1966 and is headquartered in Kansas City, MO.

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