Critical Comparison: National Bankshares (NASDAQ:NKSH) versus Bank7 (NASDAQ:BSVN)

Bank7 (NASDAQ:BSVN) and National Bankshares (NASDAQ:NKSH) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, valuation, institutional ownership and dividends.

Earnings & Valuation

This table compares Bank7 and National Bankshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank7	$142.79 million	3.20	$45.70 million	$4.64	10.43
National Bankshares	$79.08 million	2.47	$7.62 million	$1.77	17.31

Bank7 has higher revenue and earnings than National Bankshares. Bank7 is trading at a lower price-to-earnings ratio than National Bankshares, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Bank7 has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Dividends

Bank7 pays an annual dividend of $1.08 per share and has a dividend yield of 2.2%. National Bankshares pays an annual dividend of $1.46 per share and has a dividend yield of 4.8%. Bank7 pays out 23.3% of its earnings in the form of a dividend. National Bankshares pays out 82.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bank7 has increased its dividend for 5 consecutive years.

Institutional & Insider Ownership

23.5% of Bank7 shares are held by institutional investors. Comparatively, 29.7% of National Bankshares shares are held by institutional investors. 41.9% of Bank7 shares are held by company insiders. Comparatively, 3.2% of National Bankshares 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 current ratings for Bank7 and National Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank7	0	1	2	0	2.67
National Bankshares	0	0	1	0	3.00

Bank7 presently has a consensus price target of $53.50, indicating a potential upside of 10.58%. National Bankshares has a consensus price target of $38.00, indicating a potential upside of 24.02%. Given National Bankshares’ stronger consensus rating and higher possible upside, analysts clearly believe National Bankshares is more favorable than Bank7.

Profitability

This table compares Bank7 and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank7	31.99%	20.36%	2.50%
National Bankshares	13.58%	7.69%	0.70%

Summary

Bank7 beats National Bankshares on 12 of the 17 factors compared between the two stocks.

About Bank7

Bank7 Corp. operates as a bank holding company for Bank7 that provides banking and financial services to individual and corporate customers. It offers commercial deposit, commercial checking, money market, and other deposit accounts; and retail deposit services, such as certificates of deposit, money market accounts, checking accounts, negotiable order of withdrawal accounts, savings accounts, and automated teller machine access. The company also provides commercial real estate, hospitality, energy, and commercial and industrial lending services; consumer lending services to individuals for personal and household purposes comprising residential real estate loans and mortgage banking services, personal lines of credit, loans for the purchase of automobiles, and other installment loans, as well as secured and unsecured term loans and home improvement loans. It operates through a network of full-service branches in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area, and Kansas. The company was formerly known as Haines Financial Corp. Bank7 Corp. was founded in 1901 and is headquartered in Oklahoma City, Oklahoma.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.