Head to Head Comparison: Simmons First National (NASDAQ:SFNC) versus First Bancshares (NASDAQ:FBMS)

Simmons First National (NASDAQ:SFNC) and First Bancshares (NASDAQ:FBMS) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Institutional and Insider Ownership

27.6% of Simmons First National shares are owned by institutional investors. Comparatively, 70.0% of First Bancshares shares are owned by institutional investors. 1.9% of Simmons First National shares are owned by insiders. Comparatively, 3.5% of First Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Simmons First National has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, First Bancshares has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Dividends

Simmons First National pays an annual dividend of $0.84 per share and has a dividend yield of 3.5%. First Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Simmons First National pays out 82.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Bancshares pays out 45.2% of its earnings in the form of a dividend. Simmons First National has increased its dividend for 13 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Simmons First National and First Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simmons First National	$1.37 billion	2.19	$175.06 million	$1.02	23.30
First Bancshares	$387.64 million	2.91	$75.46 million	$2.21	16.37

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

Profitability

This table compares Simmons First National and First Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simmons First National	8.94%	5.15%	0.65%
First Bancshares	17.25%	8.19%	1.00%

Analyst Recommendations

This is a breakdown of current ratings for Simmons First National and First Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simmons First National	1	2	1	0	2.00
First Bancshares	0	2	2	0	2.50

Simmons First National presently has a consensus target price of $23.00, suggesting a potential downside of 3.24%. First Bancshares has a consensus target price of $37.17, suggesting a potential upside of 2.76%. Given First Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe First Bancshares is more favorable than Simmons First National.

Summary

First Bancshares beats Simmons First National on 12 of the 17 factors compared between the two stocks.

About Simmons First National

Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.

About First Bancshares

The First Bancshares, Inc. operates as the bank holding company for The First Bank that provides general commercial and retail banking services. The company operates through three segments: Commercial/Retail Bank, Mortgage Banking Division, and Holding Company. It offers deposit services, including checking, NOW, and savings accounts; other time deposits, such as daily money market accounts and longer-term certificates of deposit; and individual retirement and health savings accounts. The company also provides commercial loans comprising secured and unsecured loans for working capital, business expansion, and purchase of equipment and machinery; consumer loans consisting of equity lines of credit, as well as secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; and real estate construction and acquisition loans. In addition, it originates loans to purchase existing residential homes, construct new homes, and to refinance existing mortgages; and provides financial and wealth management services. Further, the company offers online internet banking services, automated teller machines, voice response telephone inquiry services, commercial sweep accounts, cash management services, safe deposit boxes, merchant services, mobile deposit, direct deposit of payroll and social security checks, automatic drafts for various accounts, and credit card services. It serves small to medium-sized businesses, professional concerns, individuals, associations, organizations, and governmental authorities. The company operates full-service banking and financial service offices, motor bank facility, and loan production offices in Mississippi, Alabama, Florida, Georgia, and Louisiana. The First Bancshares, Inc. was incorporated in 1995 and is headquartered in Hattiesburg, Mississippi.