Five Star Bancorp (NASDAQ:FSBC) and Summit State Bank (NASDAQ:SSBI) Head to Head Analysis

Five Star Bancorp (NASDAQ:FSBC) and Summit State Bank (NASDAQ:SSBI) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

46.9% of Five Star Bancorp shares are held by institutional investors. 21.7% of Five Star Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Five Star Bancorp and Summit State Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Star Bancorp	$148.75 million	5.06	$45.67 million	$2.70	13.04
Summit State Bank	$35.97 million	2.04	-$3.66 million	($0.13)	-83.46

Five Star Bancorp has higher revenue and earnings than Summit State Bank. Summit State Bank is trading at a lower price-to-earnings ratio than Five Star Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Five Star Bancorp and Summit State Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Five Star Bancorp	23.18%	13.88%	1.32%
Summit State Bank	-1.41%	N/A	N/A

Dividends

Five Star Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.3%. Summit State Bank pays an annual dividend of $0.16 per share and has a dividend yield of 1.5%. Five Star Bancorp pays out 29.6% of its earnings in the form of a dividend. Summit State Bank pays out -123.1% 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.

Volatility and Risk

Five Star Bancorp has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Summit State Bank has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Five Star Bancorp and Summit State Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Star Bancorp	0	2	5	0	2.71
Summit State Bank	1	0	0	0	1.00

Five Star Bancorp currently has a consensus price target of $39.40, indicating a potential upside of 11.93%. Given Five Star Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Five Star Bancorp is more favorable than Summit State Bank.

Summary

Five Star Bancorp beats Summit State Bank on 15 of the 16 factors compared between the two stocks.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.

About Summit State Bank

Summit State Bank engages in providing an array of financial services to small and medium-sized businesses, their owners and employees, entrepreneurs, high net worth families, foundations, estates, and individual consumers. It specializes in business services, personal accounts, nonprofit programs, and mobile banking ranging from lending, checking, merchant, eBanking, automated teller machines, equity loans, and others. The company was founded on December 20, 1982 and is headquartered in Santa Rosa, CA.