Critical Comparison: TrustCo Bank Corp NY (NASDAQ:TRST) versus ServisFirst Bancshares (NYSE:SFBS)

TrustCo Bank Corp NY (NASDAQ:TRST) and ServisFirst Bancshares (NYSE:SFBS) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Profitability

This table compares TrustCo Bank Corp NY and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TrustCo Bank Corp NY	22.83%	10.00%	1.02%
ServisFirst Bancshares	32.53%	17.66%	1.89%

Dividends

TrustCo Bank Corp NY pays an annual dividend of $1.60 per share and has a dividend yield of 2.8%. ServisFirst Bancshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.8%. TrustCo Bank Corp NY pays out 42.6% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 24.3% 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. ServisFirst Bancshares has raised its dividend for 10 consecutive years.

Volatility & Risk

TrustCo Bank Corp NY has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Earnings and Valuation

This table compares TrustCo Bank Corp NY and ServisFirst Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TrustCo Bank Corp NY	$278.36 million	3.54	$61.14 million	$3.76	15.38
ServisFirst Bancshares	$1.02 billion	4.45	$276.60 million	$3.13	13.23

ServisFirst Bancshares has higher revenue and earnings than TrustCo Bank Corp NY. ServisFirst Bancshares is trading at a lower price-to-earnings ratio than TrustCo Bank Corp NY, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

68.6% of TrustCo Bank Corp NY shares are held by institutional investors. Comparatively, 67.3% of ServisFirst Bancshares shares are held by institutional investors. 3.4% of TrustCo Bank Corp NY shares are held by company insiders. Comparatively, 6.5% of ServisFirst Bancshares 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 Ratings

This is a summary of recent recommendations and price targets for TrustCo Bank Corp NY and ServisFirst Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TrustCo Bank Corp NY	0	0	1	0	3.00
ServisFirst Bancshares	1	0	4	0	2.60

ServisFirst Bancshares has a consensus price target of $46.50, indicating a potential upside of 12.31%. Given ServisFirst Bancshares’ higher possible upside, analysts clearly believe ServisFirst Bancshares is more favorable than TrustCo Bank Corp NY.

Summary

ServisFirst Bancshares beats TrustCo Bank Corp NY on 12 of the 17 factors compared between the two stocks.

About TrustCo Bank Corp NY

TrustCo Bank Corp NY operates as the holding company for Trustco Bank, a federal savings bank that provides personal and business banking services to individuals and businesses. The company accepts deposits; and offers loans and investments. It also operates as a real estate investment trust that acquires, holds, and manages real estate mortgage assets, including residential mortgage loans and mortgage-backed securities. In addition, the company serves as the executor of estates and trustee of personal trusts; provides asset and wealth management, estate planning and related advice, and custodial services; and acts as trustee for various types of employee benefit plans, and corporate pension and profit-sharing trusts. It operates through banking offices in Albany, Columbia, Dutchess, Greene, Montgomery, Orange, Putnam, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Ulster, Warren, Washington, and Westchester counties of New York; Brevard, Charlotte, Flagler, Hillsborough, Indian River, Lake, Manatee, Martin, Orange, Osceola, Palm Beach, Polk, Sarasota, Seminole, and Volusia counties in Florida; Bennington County in Vermont; Berkshire County in Massachusetts; and Bergen County in New Jersey, as well as automatic teller machines. The company was founded in 1902 and is headquartered in Glenville, New York.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.