Head to Head Contrast: Simmons First National (NASDAQ:SFNC) and Northwest Bancshares (NASDAQ:NWBI)

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

Volatility & Risk

Simmons First National has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, Northwest Bancshares has a beta of 0.62, indicating that its stock price is 38% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Simmons First National and Northwest Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simmons First National	1	2	1	0	2.00
Northwest Bancshares	1	1	0	0	1.50

Simmons First National currently has a consensus price target of $23.00, suggesting a potential upside of 0.04%. Northwest Bancshares has a consensus price target of $11.00, suggesting a potential downside of 15.84%. Given Simmons First National’s stronger consensus rating and higher probable upside, research analysts clearly believe Simmons First National is more favorable than Northwest Bancshares.

Dividends

Simmons First National pays an annual dividend of $0.84 per share and has a dividend yield of 3.7%. Northwest Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 6.1%. Simmons First National pays out 82.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Northwest Bancshares pays out 98.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Simmons First National has increased its dividend for 13 consecutive years.

Earnings and Valuation

This table compares Simmons First National and Northwest Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simmons First National	$1.37 billion	2.11	$175.06 million	$1.02	22.54
Northwest Bancshares	$701.74 million	2.37	$134.96 million	$0.81	16.14

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

Profitability

This table compares Simmons First National and Northwest Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simmons First National	8.94%	5.15%	0.65%
Northwest Bancshares	14.28%	8.72%	0.93%

Insider and Institutional Ownership

27.6% of Simmons First National shares are owned by institutional investors. Comparatively, 66.3% of Northwest Bancshares shares are owned by institutional investors. 1.9% of Simmons First National shares are owned by company insiders. Comparatively, 1.1% of Northwest Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Simmons First National beats Northwest Bancshares on 11 of the 17 factors compared between the two stocks.

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.

About Northwest Bancshares

Northwest Bancshares, Inc. operates as the bank holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans, shorter term consumer loans, and loans collateralized by multi-family residential and commercial real estate; home equity loans and lines of credit; commercial business and real estate loans; commercial loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by investment accounts, as well as investment management and trust services. The company operates community banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.