Analyzing Benchmark Bankshares (OTCMKTS:BMBN) and Simmons First National (NASDAQ:SFNC)

Benchmark Bankshares (OTCMKTS:BMBN) and Simmons First National (NASDAQ:SFNC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, earnings, valuation, risk, dividends, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

3.2% of Benchmark Bankshares shares are held by institutional investors. Comparatively, 27.6% of Simmons First National shares are held by institutional investors. 14.0% of Benchmark Bankshares shares are held by company insiders. Comparatively, 0.8% of Simmons First National shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for Benchmark Bankshares and Simmons First National, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Benchmark Bankshares	0	0	0	0	0.00
Simmons First National	0	5	2	2	2.67

Simmons First National has a consensus target price of $22.00, suggesting a potential upside of 1.95%. Given Simmons First National’s stronger consensus rating and higher probable upside, analysts plainly believe Simmons First National is more favorable than Benchmark Bankshares.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Benchmark Bankshares	23.80%	N/A	N/A
Simmons First National	-25.44%	7.81%	1.07%

Risk & Volatility

Benchmark Bankshares has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, Simmons First National has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.

Dividends

Benchmark Bankshares pays an annual dividend of $0.96 per share and has a dividend yield of 2.5%. Simmons First National pays an annual dividend of $0.86 per share and has a dividend yield of 4.0%. Benchmark Bankshares pays out 21.5% of its earnings in the form of a dividend. Simmons First National pays out -33.6% 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. Simmons First National has raised its dividend for 14 consecutive years. Simmons First National is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Benchmark Bankshares and Simmons First National”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Benchmark Bankshares	$83.37 million	2.01	$19.84 million	$4.46	8.46
Simmons First National	$1.43 billion	2.19	-$397.55 million	($2.56)	-8.43

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

Summary

Simmons First National beats Benchmark Bankshares on 13 of the 18 factors compared between the two stocks.

About Benchmark Bankshares

Benchmark Bankshares, Inc. operates as the holding company for Benchmark Community Bank that provides various banking products and services in the United States. The company accepts various deposits, such as checking, saving, commercial services, and youth accounts. Its loan products include personal, mortgage, other real estate, business, auto, and student loans. The company also offers credit and debit cards; wealth management services comprising financial solutions, financial and retirement planning, and portfolio management, as well as estate, charitable giving, and trust services; and reorder checks, safe deposit boxes, wire transfers, bill pay, and internet and mobile banking services. The company was founded in 1971 and is based in Kenbridge, Virginia.

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.