Community Trust Bancorp (NASDAQ:CTBI) and Business First Bancshares (NASDAQ:BFST) Critical Comparison

Business First Bancshares (NASDAQ:BFST) and Community Trust Bancorp (NASDAQ:CTBI) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Profitability

This table compares Business First Bancshares and Community Trust Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Business First Bancshares	17.08%	11.18%	1.15%
Community Trust Bancorp	25.48%	12.58%	1.60%

Volatility & Risk

Business First Bancshares has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, Community Trust Bancorp has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Dividends

Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. Community Trust Bancorp pays an annual dividend of $2.60 per share and has a dividend yield of 3.7%. Business First Bancshares pays out 21.4% of its earnings in the form of a dividend. Community Trust Bancorp pays out 42.8% 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. Business First Bancshares has increased its dividend for 2 consecutive years and Community Trust Bancorp has increased its dividend for 44 consecutive years. Community Trust 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 recent ratings and price targets for Business First Bancshares and Community Trust Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Business First Bancshares	0	0	5	0	3.00
Community Trust Bancorp	0	2	2	0	2.50

Business First Bancshares currently has a consensus target price of $35.75, indicating a potential upside of 9.80%. Community Trust Bancorp has a consensus target price of $78.50, indicating a potential upside of 12.01%. Given Community Trust Bancorp’s higher possible upside, analysts plainly believe Community Trust Bancorp is more favorable than Business First Bancshares.

Valuation & Earnings

This table compares Business First Bancshares and Community Trust Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Business First Bancshares	$516.55 million	2.03	$87.86 million	$2.80	11.63
Community Trust Bancorp	$409.34 million	3.11	$98.06 million	$6.08	11.53

Community Trust Bancorp has lower revenue, but higher earnings than Business First Bancshares. Community Trust Bancorp is trading at a lower price-to-earnings ratio than Business First Bancshares, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

47.4% of Business First Bancshares shares are owned by institutional investors. Comparatively, 60.2% of Community Trust Bancorp shares are owned by institutional investors. 5.7% of Business First Bancshares shares are owned by insiders. Comparatively, 2.6% of Community Trust Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Community Trust Bancorp beats Business First Bancshares on 10 of the 17 factors compared between the two stocks.

About Business First Bancshares

Business First Bancshares, Inc. is the bank holding company for b1BANK, a regional bank serving businesses, individuals and institutions. The bank offers commercial and personal banking, treasury management, private banking and digital banking services. Founded in Louisiana in 2006 and headquartered in Baton Rouge, Business First has expanded its presence across Louisiana and into Texas. Its services include lending and deposit products for businesses, as well as checking, savings and other banking solutions for consumers.

About Community Trust Bancorp

Community Trust Bancorp, Inc. is a bank holding company headquartered in Pikeville, Kentucky. Through its subsidiary, Community Trust Bank, the company provides commercial and personal banking services, including deposit accounts, loans, and mortgage lending. The company also offers trust, investment, and wealth management services through Community Trust and Investment Company, as well as insurance services. Its operations serve communities in Kentucky, southern West Virginia, and northeastern Tennessee.