Contrasting South Plains Financial (NASDAQ:SPFI) and Peoples Bancorp of North Carolina (NASDAQ:PEBK)

Peoples Bancorp of North Carolina (NASDAQ:PEBK) and South Plains Financial (NASDAQ:SPFI) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.

Profitability

This table compares Peoples Bancorp of North Carolina and South Plains Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peoples Bancorp of North Carolina	15.80%	13.85%	1.00%
South Plains Financial	16.53%	11.42%	1.09%

Risk & Volatility

Peoples Bancorp of North Carolina has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, South Plains Financial has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Dividends

Peoples Bancorp of North Carolina pays an annual dividend of $0.76 per share and has a dividend yield of 3.0%. South Plains Financial pays an annual dividend of $0.56 per share and has a dividend yield of 1.6%. Peoples Bancorp of North Carolina pays out 25.6% of its earnings in the form of a dividend. South Plains Financial pays out 15.0% 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. Peoples Bancorp of North Carolina has raised its dividend for 11 consecutive years. Peoples Bancorp of North Carolina is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Peoples Bancorp of North Carolina and South Plains Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peoples Bancorp of North Carolina	0	0	0	0	N/A
South Plains Financial	0	0	3	0	3.00

South Plains Financial has a consensus price target of $34.33, indicating a potential downside of 2.49%. Given South Plains Financial’s higher possible upside, analysts clearly believe South Plains Financial is more favorable than Peoples Bancorp of North Carolina.

Institutional and Insider Ownership

43.8% of Peoples Bancorp of North Carolina shares are held by institutional investors. Comparatively, 55.0% of South Plains Financial shares are held by institutional investors. 17.4% of Peoples Bancorp of North Carolina shares are held by company insiders. Comparatively, 25.4% of South Plains Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Peoples Bancorp of North Carolina and South Plains Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peoples Bancorp of North Carolina	$94.78 million	1.45	$15.55 million	$2.97	8.49
South Plains Financial	$181.56 million	3.18	$62.74 million	$3.74	9.41

South Plains Financial has higher revenue and earnings than Peoples Bancorp of North Carolina. Peoples Bancorp of North Carolina is trading at a lower price-to-earnings ratio than South Plains Financial, indicating that it is currently the more affordable of the two stocks.

Summary

South Plains Financial beats Peoples Bancorp of North Carolina on 13 of the 16 factors compared between the two stocks.

About Peoples Bancorp of North Carolina

Peoples Bancorp of North Carolina, Inc. operates as the bank holding company for Peoples Bank that provides various banking products and services for individuals and small-to medium-sized businesses. It offers checking, savings, money market, and retirement accounts; certificates of deposits; and credit and debit cards. The company also originates commercial real estate loans, commercial loans, construction and land development loans, and residential mortgage loans; and individual taxpayer identification number mortgage loans, as well as agricultural loans. In addition, it provides investment counseling and non-deposit investment products, such as stocks, bonds, mutual funds, tax deferred annuities, and related brokerage services; and real estate appraisal and brokerage services. Further, the company operates as a clearing-house for the provision of appraisal services for community banks; and acquires, manages, and disposes real property, other collateral, and other assets obtained in the ordinary course of collecting debts. Peoples Bancorp of North Carolina, Inc. was founded in 1912 and is headquartered in Newton, North Carolina.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.