Head to Head Comparison: U.S. Bancorp (NYSE:USB) & National Bankshares (NYSE:NKSH)

U.S. Bancorp (NYSE:USB) and National Bankshares (NASDAQ:NKSH) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Dividends

U.S. Bancorp pays an annual dividend of $1.68 per share and has a dividend yield of 4.6%. National Bankshares pays an annual dividend of $1.34 per share and has a dividend yield of 5.3%. U.S. Bancorp pays out 38.7% of its earnings in the form of a dividend. National Bankshares pays out 50.6% 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. U.S. Bancorp has raised its dividend for 9 consecutive years and National Bankshares has raised its dividend for 18 consecutive years. National Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares U.S. Bancorp and National Bankshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
U.S. Bancorp $27.33 billion 2.03 $6.91 billion $4.34 8.49
National Bankshares $53.94 million 3.02 $17.47 million $2.65 9.46

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for U.S. Bancorp and National Bankshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
U.S. Bancorp 4 7 11 0 2.32
National Bankshares 0 1 1 0 2.50

U.S. Bancorp currently has a consensus target price of $47.08, indicating a potential upside of 27.78%. National Bankshares has a consensus target price of $32.00, indicating a potential upside of 27.59%. Given U.S. Bancorp’s higher probable upside, equities analysts plainly believe U.S. Bancorp is more favorable than National Bankshares.

Profitability

This table compares U.S. Bancorp and National Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
U.S. Bancorp 19.70% 11.82% 1.07%
National Bankshares 31.58% 9.10% 1.31%

Insider and Institutional Ownership

73.5% of U.S. Bancorp shares are owned by institutional investors. Comparatively, 30.9% of National Bankshares shares are owned by institutional investors. 0.2% of U.S. Bancorp shares are owned by company insiders. Comparatively, 2.4% of National Bankshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk and Volatility

U.S. Bancorp has a beta of 1.16, indicating that its stock price is 16% more volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Summary

U.S. Bancorp beats National Bankshares on 10 of the 17 factors compared between the two stocks.

U.S. Bancorp Company Profile

U.S. Bancorp, a financial services holding company, provides various financial services in the United States. It operates in five segments: Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support. The company offers depository services, including checking accounts, savings accounts, and time certificate contracts; and lending services, such as traditional credit products, as well as credit card services, lease financing and import/export trade, asset-backed lending, agricultural finance, and other products. It also provides ancillary services comprising capital markets, treasury management, and receivable lock-box collection services to corporate customers; and a range of asset management and fiduciary services for individuals, estates, foundations, business corporations, and charitable organizations. In addition, the company offers investment and insurance products to its customers principally within its markets, as well as fund administration services to a range of mutual and other funds. Further, it provides corporate and purchasing card, and corporate trust services; and merchant processing services, as well as cash and investment management, ATM processing, mortgage banking, and brokerage and leasing services. The company offers its products and services through operating a network of 3,018 banking offices principally operating in the Midwest and West regions of the United States, as well as through online services and over mobile devices. It also operates a network of 4,681 ATMs. The company was founded in 1863 and is headquartered in Minneapolis, Minnesota.

National Bankshares Company Profile

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services for individual and business customers; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. As of February 22, 2018, it operated 24 branch offices, a loan production office, and 24 automated teller machines in Southwest Virginia. National Bankshares, Inc. was founded in 1891 and is headquartered in Blacksburg, Virginia.

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