Head-To-Head Review: Sierra Bancorp (NASDAQ:BSRR) versus Five Star Bancorp (NASDAQ:FSBC)

Five Star Bancorp (NASDAQ:FSBC) and Sierra Bancorp (NASDAQ:BSRR) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, earnings, risk, dividends, institutional ownership, analyst recommendations and profitability.

Earnings & Valuation

This table compares Five Star Bancorp and Sierra Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Five Star Bancorp	$213.40 million	3.77	$45.67 million	$2.70	13.95
Sierra Bancorp	$203.87 million	2.22	$40.56 million	$2.87	11.87

Five Star Bancorp has higher revenue and earnings than Sierra Bancorp. Sierra Bancorp is trading at a lower price-to-earnings ratio than Five Star Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Five Star Bancorp and Sierra Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Five Star Bancorp	23.18%	13.88%	1.32%
Sierra Bancorp	19.70%	11.17%	1.08%

Volatility and Risk

Five Star Bancorp has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Sierra Bancorp has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Dividends

Five Star Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.1%. Sierra Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. Five Star Bancorp pays out 29.6% of its earnings in the form of a dividend. Sierra Bancorp pays out 34.8% 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. Sierra Bancorp has raised its dividend for 2 consecutive years. Sierra Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Five Star Bancorp and Sierra Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Five Star Bancorp	0	2	5	0	2.71
Sierra Bancorp	0	2	2	0	2.50

Five Star Bancorp presently has a consensus target price of $39.40, indicating a potential upside of 4.62%. Sierra Bancorp has a consensus target price of $34.50, indicating a potential upside of 1.29%. Given Five Star Bancorp’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Five Star Bancorp is more favorable than Sierra Bancorp.

Institutional & Insider Ownership

46.9% of Five Star Bancorp shares are held by institutional investors. Comparatively, 55.4% of Sierra Bancorp shares are held by institutional investors. 25.6% of Five Star Bancorp shares are held by company insiders. Comparatively, 11.6% of Sierra Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Five Star Bancorp beats Sierra Bancorp on 12 of the 17 factors compared between the two stocks.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.

About Sierra Bancorp

Sierra Bancorp operates as the bank holding company for Bank of the Sierra that provides retail and commercial banking services to individuals and businesses in California. It accepts various deposit products, such as checking accounts, savings accounts, money market demand accounts, time deposits, retirement accounts, and sweep accounts. The company's loan products include agricultural, commercial, consumer, real estate, construction, and mortgage loans. It also offers automated teller machines; electronic point-of-sale payment alternatives; online and automated telephone banking services; and remote deposit capture and automated payroll services for business customers. Sierra Bancorp was founded in 1977 and is headquartered in Porterville, California.