Comparing Simmons First National (NASDAQ:SFNC) & Associated Banc (NYSE:ASB)

Associated Banc (NYSE:ASB) and Simmons First National (NASDAQ:SFNC) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Associated Banc and Simmons First National, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Associated Banc	0	6	5	1	2.58
Simmons First National	1	3	4	1	2.56

Associated Banc presently has a consensus target price of $32.00, indicating a potential upside of 8.84%. Simmons First National has a consensus target price of $25.50, indicating a potential upside of 9.77%. Given Simmons First National’s higher possible upside, analysts clearly believe Simmons First National is more favorable than Associated Banc.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Associated Banc	$2.46 billion	2.26	$474.78 million	$2.86	10.28
Simmons First National	$1.43 billion	2.35	-$397.55 million	($2.53)	-9.18

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

Insider & Institutional Ownership

83.0% of Associated Banc shares are held by institutional investors. Comparatively, 27.6% of Simmons First National shares are held by institutional investors. 0.7% of Associated Banc shares are held by insiders. Comparatively, 0.8% of Simmons First National shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Associated Banc pays an annual dividend of $0.96 per share and has a dividend yield of 3.3%. Simmons First National pays an annual dividend of $0.86 per share and has a dividend yield of 3.7%. Associated Banc pays out 33.6% of its earnings in the form of a dividend. Simmons First National pays out -34.0% 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. Associated Banc has raised its dividend for 13 consecutive years and 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Associated Banc	19.66%	10.64%	1.12%
Simmons First National	-24.64%	8.32%	1.16%

Risk and Volatility

Associated Banc has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, Simmons First National has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.

Summary

Associated Banc beats Simmons First National on 9 of the 17 factors compared between the two stocks.

About Associated Banc

Associated Banc-Corp, a bank holding company, provides various banking and nonbanking products to individuals and businesses in Wisconsin, Illinois, and Minnesota. The company offers lending solutions, including commercial loans and lines of credit, commercial real estate financing, construction loans, letters of credit, leasing, asset based lending and equipment finance, loan syndications products, residential mortgages, home equity loans and lines of credit, personal and installment loans, auto finance and business loans, and business lines of credit. It also provides deposit and cash management solutions, such as commercial checking and interest-bearing deposit products, cash vault and night depository services, liquidity solutions, payables and receivables solutions, and information services; specialized financial services, such as interest rate risk management and foreign exchange solutions; fiduciary services, such as administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management services; and investable funds solutions, including savings, money market deposit accounts, IRA accounts, CDs, fixed and variable annuities, full-service, discount, and online investment brokerage; investment advisory services; and trust and investment management accounts. In addition, the company offers deposit and transactional solutions, including checking, credit, debit and pre-paid cards, online banking and bill pay; and money transfer services. Associated Banc-Corp was founded in 1861 and is headquartered in Green Bay, Wisconsin.

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.