Prosperity Bancshares (NYSE:PB – Get Free Report) and Stock Yards Bancorp (NASDAQ:SYBT – Get Free Report) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.
Profitability
This table compares Prosperity Bancshares and Stock Yards Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Prosperity Bancshares | 26.79% | 6.64% | 1.22% |
| Stock Yards Bancorp | 22.54% | 12.71% | 1.38% |
Analyst Ratings
This is a breakdown of current ratings and price targets for Prosperity Bancshares and Stock Yards Bancorp, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Prosperity Bancshares | 0 | 6 | 10 | 0 | 2.63 |
| Stock Yards Bancorp | 0 | 4 | 0 | 0 | 2.00 |
Volatility & Risk
Prosperity Bancshares has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Stock Yards Bancorp has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.
Dividends
Prosperity Bancshares pays an annual dividend of $2.32 per share and has a dividend yield of 3.4%. Stock Yards Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 1.7%. Prosperity Bancshares pays out 44.2% of its earnings in the form of a dividend. Stock Yards Bancorp pays out 30.0% 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. Prosperity Bancshares has raised its dividend for 27 consecutive years and Stock Yards Bancorp has raised its dividend for 15 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
80.7% of Prosperity Bancshares shares are held by institutional investors. Comparatively, 56.5% of Stock Yards Bancorp shares are held by institutional investors. 4.2% of Prosperity Bancshares shares are held by company insiders. Comparatively, 3.4% of Stock Yards Bancorp 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.
Earnings and Valuation
This table compares Prosperity Bancshares and Stock Yards Bancorp”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Prosperity Bancshares | $1.17 billion | 5.55 | $479.39 million | $5.25 | 13.04 |
| Stock Yards Bancorp | $355.24 million | 6.10 | $114.54 million | $4.14 | 17.77 |
Prosperity Bancshares has higher revenue and earnings than Stock Yards Bancorp. Prosperity Bancshares is trading at a lower price-to-earnings ratio than Stock Yards Bancorp, indicating that it is currently the more affordable of the two stocks.
Summary
Prosperity Bancshares beats Stock Yards Bancorp on 11 of the 17 factors compared between the two stocks.
About Prosperity Bancshares
Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.
About Stock Yards Bancorp
Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.
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