Head to Head Analysis: Southside Bancshares (NASDAQ:SBSI) vs. Touchstone Bankshares (OTCMKTS:TSBA)

Southside Bancshares (NASDAQ:SBSI) and Touchstone Bankshares (OTCMKTS:TSBA) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Analyst Recommendations

This is a summary of current recommendations for Southside Bancshares and Touchstone Bankshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southside Bancshares	0	3	0	0	2.00
Touchstone Bankshares	0	0	0	0	0.00

Southside Bancshares currently has a consensus price target of $33.50, indicating a potential upside of 20.09%. Given Southside Bancshares’ stronger consensus rating and higher possible upside, research analysts clearly believe Southside Bancshares is more favorable than Touchstone Bankshares.

Volatility & Risk

Southside Bancshares has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Touchstone Bankshares has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Valuation and Earnings

This table compares Southside Bancshares and Touchstone Bankshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southside Bancshares	$240.20 million	3.49	$88.49 million	$2.30	12.13
Touchstone Bankshares	N/A	N/A	$1.61 million	$0.65	21.92

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

Insider & Institutional Ownership

55.7% of Southside Bancshares shares are held by institutional investors. Comparatively, 0.4% of Touchstone Bankshares shares are held by institutional investors. 6.0% of Southside Bancshares shares are held by company insiders. Comparatively, 10.4% of Touchstone Bankshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Southside Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 5.2%. Touchstone Bankshares pays an annual dividend of $0.32 per share and has a dividend yield of 2.2%. Southside Bancshares pays out 62.6% of its earnings in the form of a dividend. Touchstone Bankshares pays out 49.2% 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. Southside Bancshares has increased its dividend for 30 consecutive years. Southside Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Southside Bancshares and Touchstone Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southside Bancshares	19.40%	11.10%	1.06%
Touchstone Bankshares	N/A	N/A	N/A

Summary

Southside Bancshares beats Touchstone Bankshares on 12 of the 15 factors compared between the two stocks.

About Southside Bancshares

Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposits. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration of irrevocable, revocable, and testamentary trusts, estate administration, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. In addition, the company provides retirement and employee benefit accounts, including plans and profit sharing plans; and telephone, internet, and mobile banking services. The company offers various banking services through branches, drive-thru facilities, automated teller machines, and interactive teller machines. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.

About Touchstone Bankshares

Touchstone Bankshares, Inc. operates as the bank holding company for Touchstone Bank that provides various community banking products and services in the United States. The company offers personal and business savings and checking accounts. It also provides home mortgage, professional mortgage, home equity, auto, and personal term loans; personal lines of credit; and business loans comprising commercial real estate, operating capital, business term, and construction loans, as well as business lines of credit. In addition, the company offers credit and debit cards; and digital banking, treasury, wealth management, and financial planning services. It has branches in northern North Carolina and south-central Virginia. The company was founded in 1906 and is headquartered in Prince George, Virginia.