Pathward Financial (NASDAQ:CASH) versus Red River Bancshares (NASDAQ:RRBI) Head-To-Head Comparison

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

Institutional and Insider Ownership

27.6% of Red River Bancshares shares are owned by institutional investors. Comparatively, 92.7% of Pathward Financial shares are owned by institutional investors. 16.6% of Red River Bancshares shares are owned by company insiders. Comparatively, 1.4% of Pathward Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Red River Bancshares and Pathward Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red River Bancshares	$169.85 million	3.98	$42.76 million	$6.95	14.79
Pathward Financial	$851.49 million	2.00	$185.87 million	$7.98	10.26

Pathward Financial has higher revenue and earnings than Red River Bancshares. Pathward Financial is trading at a lower price-to-earnings ratio than Red River Bancshares, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Red River Bancshares and Pathward Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red River Bancshares	0	3	1	0	2.25
Pathward Financial	0	0	3	0	3.00

Red River Bancshares currently has a consensus target price of $106.00, suggesting a potential upside of 3.10%. Pathward Financial has a consensus target price of $101.00, suggesting a potential upside of 23.41%. Given Pathward Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Pathward Financial is more favorable than Red River Bancshares.

Risk and Volatility

Red River Bancshares has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500. Comparatively, Pathward Financial has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Dividends

Red River Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Pathward Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.2%. Red River Bancshares pays out 14.4% of its earnings in the form of a dividend. Pathward Financial pays out 2.5% 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. Red River Bancshares has increased its dividend for 3 consecutive years. Red River Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Red River Bancshares and Pathward Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red River Bancshares	26.25%	12.47%	1.39%
Pathward Financial	21.03%	20.61%	2.41%

Summary

Pathward Financial beats Red River Bancshares on 11 of the 17 factors compared between the two stocks.

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 commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.

About Pathward Financial

Pathward Financial, Inc. operates as the bank holding company for Pathward, National Association that provides various banking products and services in the United States. The company operates through three segments: Consumer, Commercial, and Corporate Services/Other. It offers demand deposit accounts, savings accounts, and money market savings accounts. The company also provides commercial finance product comprising term lending, asset-based lending, factoring, lease financing, insurance premium finance, government guaranteed lending, and other commercial finance products; consumer credit products; other consumer financing services; tax services, which includes short-term refund advance loans and short-term electronic return originator advance loans; and warehouse financing services. In addition, it issues prepaid cards; and offers payment solutions, such as acceptance, processing, and settlement of credit card and debit card payments. The company was formerly known as Meta Financial Group, Inc. and changed its name to Pathward Financial, Inc. in July 2022. Pathward Financial, Inc. was founded in 1954 and is based in Sioux Falls, South Dakota.