Analyzing Southside Bancshares (NYSE:SBSI) & Valley National Bancorp (NASDAQ:VLY)

Valley National Bancorp (NASDAQ:VLY) and Southside Bancshares (NYSE:SBSI) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Institutional and Insider Ownership

61.0% of Valley National Bancorp shares are held by institutional investors. Comparatively, 55.7% of Southside Bancshares shares are held by institutional investors. 1.1% of Valley National Bancorp shares are held by company insiders. Comparatively, 5.1% of Southside Bancshares 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.

Profitability

This table compares Valley National Bancorp and Southside Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Valley National Bancorp	19.49%	9.13%	1.06%
Southside Bancshares	16.70%	11.16%	1.11%

Valuation and Earnings

This table compares Valley National Bancorp and Southside Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Valley National Bancorp	$3.49 billion	2.07	$597.98 million	$1.18	11.12
Southside Bancshares	$419.03 million	2.23	$69.18 million	$2.54	12.32

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Valley National Bancorp and Southside Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Valley National Bancorp	0	4	10	3	2.94
Southside Bancshares	1	4	1	0	2.00

Valley National Bancorp currently has a consensus target price of $16.36, indicating a potential upside of 24.67%. Southside Bancshares has a consensus target price of $34.75, indicating a potential upside of 11.08%. Given Valley National Bancorp’s stronger consensus rating and higher probable upside, research analysts plainly believe Valley National Bancorp is more favorable than Southside Bancshares.

Dividends

Valley National Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 3.4%. Southside Bancshares pays an annual dividend of $1.48 per share and has a dividend yield of 4.7%. Valley National Bancorp pays out 37.3% of its earnings in the form of a dividend. Southside Bancshares pays out 58.3% 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. Southside Bancshares has raised 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.

Volatility & Risk

Valley National Bancorp has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.

Summary

Valley National Bancorp beats Southside Bancshares on 10 of the 18 factors compared between the two stocks.

About Valley National Bancorp

Valley National Bancorp operates as the holding company for Valley National Bank that provides various commercial, private banking, retail, insurance, and wealth management financial services products. It operates through Consumer Banking, Commercial Banking, and Treasury and Corporate other segments. The company offers non-interest bearing, savings, NOW, money market, and time deposit accounts; commercial and industrial, commercial real estate, residential mortgage, and automobile loans; loans secured by the cash surrender value of life insurance; home equity loans and lines of credit; automobile financing; and secured and unsecured other consumer loans. It also invests in various securities and interest-bearing deposits with other banks; and provides international banking services, such as standby and documentary letters of credit, and related products, as well as foreign exchange transactions, documentary collections, and foreign wire transfers services. In addition, the company offers investment services for individuals and small to medium sized businesses; and trusts investment strategies designed for various investment profiles and objectives. Further, it provides trust services, such as living and testamentary trusts, investment management, custodial and escrow services, and estate administration to individuals; tax credit advisory services; brokerage services; property and casualty, life, health, and title insurance agency services; and health care equipment lending and other commercial equipment leasing services, as well as owns real estate related investments. Additionally, the company offers online, mobile, and telephone banking services; receivable, payment, and security solution, merchant, payroll processing, and liquidity services; credit cards; and drive-in and night deposit, automated teller machine, remote deposit capture, and safe deposit facility services. Valley National Bancorp was founded in 1927 and is headquartered in Morristown, New Jersey.

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 deposit. 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, revocable and testamentary trusts, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. As of December 31, 2021, the company operated through 56 banking facilities and 73 ATMs/ITMs. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.