Analyzing Guaranty Federal Bancshares (NASDAQ:GFED) and Red River Bancshares (NASDAQ:RRBI)

Guaranty Federal Bancshares (NASDAQ:GFED) and Red River Bancshares (NASDAQ:RRBI) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, earnings, profitability and risk.

Analyst Recommendations

This is a summary of current ratings and target prices for Guaranty Federal Bancshares and Red River Bancshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guaranty Federal Bancshares 0 0 1 0 3.00
Red River Bancshares 0 1 1 0 2.50

Guaranty Federal Bancshares currently has a consensus price target of $28.00, indicating a potential upside of 16.86%. Red River Bancshares has a consensus price target of $57.00, indicating a potential upside of 18.75%. Given Red River Bancshares’ higher probable upside, analysts clearly believe Red River Bancshares is more favorable than Guaranty Federal Bancshares.

Insider & Institutional Ownership

27.8% of Guaranty Federal Bancshares shares are held by institutional investors. 29.5% of Guaranty Federal Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Guaranty Federal Bancshares and Red River Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Guaranty Federal Bancshares 20.09% 13.49% 1.12%
Red River Bancshares N/A N/A N/A

Earnings & Valuation

This table compares Guaranty Federal Bancshares and Red River Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Guaranty Federal Bancshares $49.80 million 2.16 $7.33 million $2.18 10.99
Red River Bancshares N/A N/A N/A N/A N/A

Guaranty Federal Bancshares has higher revenue and earnings than Red River Bancshares.

Dividends

Guaranty Federal Bancshares pays an annual dividend of $0.52 per share and has a dividend yield of 2.2%. Red River Bancshares does not pay a dividend. Guaranty Federal Bancshares pays out 23.9% of its earnings in the form of a dividend. Guaranty Federal Bancshares has raised its dividend for 4 consecutive years.

Summary

Guaranty Federal Bancshares beats Red River Bancshares on 9 of the 11 factors compared between the two stocks.

About Guaranty Federal Bancshares

Guaranty Federal Bancshares, Inc. operates as the bank holding company for Guaranty Bank that provides a range of banking and mortgage services to individual and corporate customers in southwest Missouri. The company's deposit products include checking accounts, money market accounts, savings accounts, fixed-term certificates of deposit, and individual retirement accounts, as well as demand deposits and NOW accounts. Its loan portfolio comprises commercial real estate loans, one-to four-family mortgage loans, multi-family residential mortgage loans, and construction loans; and consumer and other loans, such as loans secured by certificates of deposit, automobile loans, boat loans, and home equity loans, as well as business loans. As of January 23, 2019, the company had 16 full-service branches in Greene, Christian, Jasper, and Newton Counties and a loan production office in Webster County. Guaranty Federal Bancshares, Inc. was founded in 1913 and is based in Springfield, Missouri.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to businesses, professionals, individuals, and public entities in Louisiana. It provides consumer checking accounts, money market accounts, and time deposits; real estate loans, commercial loans, treasury management services; and private banking services, residential mortgage lending, and investment services. The company operates a network of 23 banking centers, as well as 1 loan production office in Covington, Louisiana. Red River Bancshares, Inc. was founded in 1998 and is headquartered in Alexandria, Louisiana.

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