Financial services

Critical Investigation: Corporate Financial Services (NASDAQ:EFSC) vs. ServisFirst Bancshares (NASDAQ:SFBS)


Enterprise Financial Services (NASDAQ:EFSC – Get Rating) and ServisFirst Bancshares (NASDAQ:SFBS – Get Rating) are both finance companies, but which is the better stock? We’ll compare the two companies based on valuation strength, profitability, dividends, analyst recommendations, risk, earnings, and institutional ownership.

Benefits and evaluation

This table compares the gross revenue, earnings per share and valuation of Enterprise Financial Services and ServisFirst Bancshares.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Business Financial Services $450.97 million 3.70 $133.05 million $3.90 11:33 am
ServisFirst Bancshares $449.76 million 9.69 $207.73 million $3.93 8:44 p.m.

ServisFirst Bancshares has lower revenues, but higher profits than Enterprise Financial Services. Enterprise Financial Services trades at a lower price-to-earnings ratio than ServisFirst Bancshares, indicating that it is currently the more affordable of the two stocks.

Institutional and insider ownership

64.8% of Enterprise Financial Services shares are held by institutional investors. In comparison, 61.5% of ServisFirst Bancshares shares are held by institutional investors. 5.9% of Enterprise Financial Services shares are held by insiders. Comparatively, 8.3% of ServisFirst Bancshares shares are held by insiders. Strong institutional ownership indicates that endowments, hedge funds, and large fund managers believe a stock will outperform the market over the long term.

Volatility and risk

Enterprise Financial Services has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500. In comparison, ServisFirst Bancshares has a beta of 0.99, indicating that its stock price stock is 1% less volatile than the S&P 500.

Dividends

Enterprise Financial Services pays an annual dividend of $0.84 per share and has a dividend yield of 1.9%. ServisFirst Bancshares pays an annual dividend of $0.92 per share and has a dividend yield of 1.1%. Enterprise Financial Services pays 21.5% of its profits as a dividend. ServisFirst Bancshares pays 23.4% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Enterprise Financial Services has increased its dividend for 5 consecutive years. Enterprise Financial Services is clearly the best dividend stock, given its higher yield and longer history of dividend growth.

Analyst Notes

This is a breakdown of the current ratings for Enterprise Financial Services and ServisFirst Bancshares, as reported by MarketBeat.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Business Financial Services 0 0 2 0 3.00
ServisFirst Bancshares 0 2 0 0 2.00

Enterprise Financial Services currently has a consensus price target of $58.00, indicating a potential upside of 31.31%. ServisFirst Bancshares has a consensus price target of $86.50, indicating a potential upside of 7.69%. Given Enterprise Financial Services’ better consensus rating and higher likely upside potential, stock analysts clearly believe that Enterprise Financial Services is more favorable than ServisFirst Bancshares.

Profitability

This table compares the net margins, return on equity and return on assets of Enterprise Financial Services and ServisFirst Bancshares.

Net margins Return on equity return on assets
Business Financial Services 29.50% 13.08% 1.42%
ServisFirst Bancshares 46.29% 18.82% 1.45%

Summary

Enterprise Financial Services beats ServisFirst Bancshares on 9 of the 17 factors compared between the two stocks.

About Business Financial Services (Get a rating)

Enterprise Financial Services Corp operates as a financial holding company for Enterprise Bank & Trust which offers banking and wealth management services to individuals and businesses. The company offers checking, savings and money market accounts, as well as certificates of deposit. It also offers commercial and industrial real estate, commercial, construction and land development, residential real estate, agricultural and consumer loans. In addition, the company offers cash management and international trade services; tax credit brokerage services consisting of the acquisition of tax credits and the sale of these tax credits to clients; and financial and estate planning, investment management and trust services to businesses, individuals, institutions, pension plans and not-for-profit organizations. In addition, it offers fiduciary, financial advisory and merchant processing services; and debit and credit cards. In addition, the company provides international banking, insurance, internet and mobile banking, remote deposit collection, positive payment, fraud detection and prevention, automated payments, imaging checks and imaging of statements and documents; and cash management products, controlled disbursements, repurchase agreements and scanning investment accounts. It operates banking sites and administrative offices in market areas of Arizona, California, Kansas, Missouri, Nevada and New Mexico, as well as a network of SBA loan origination offices and of filing production offices in various states. Enterprise Financial Services Corp was founded in 1988 and is headquartered in Clayton, Missouri.

About ServisFirst Bancshares (Get a rating)

ServisFirst Bancshares, Inc. operates as a bank holding company for ServisFirst Bank which provides various retail and corporate banking services. 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 loan products, such as seasonal, bridging and term loans for working capital, business expansion, acquisition of property, 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, deposit-backed loans, and secured and unsecured personal loans. It also offers other banking products and services, including telephone and mobile banking, direct deposit, internet banking, traveler’s checks, safe deposit boxes, attorney’s trust accounts, direct debits accounts, ATMs and debit card systems, as well as Visa credit cards. ; treasury and cash management services; wire transfer, night deposit, mail banking and telecapture services; and correspondent banking services to other financial institutions. In addition, the company owns and manages interests in residential mortgage loans and commercial real estate loans issued by ServisFirst Bank in Alabama, Florida, Georgia and Tennessee. It operates 23 full-service banking offices located in Alabama, Florida, Georgia, South Carolina and Tennessee, as well as 2 loan origination offices in Florida. The company was founded in 2005 and is based in Birmingham, Alabama.



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