Comparing Third Coast Bancshares (NASDAQ:TCBX) & National Bank (NYSE:NBHC)

National Bank (NYSE:NBHC) and Third Coast Bancshares (NASDAQ:TCBX) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, earnings, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for National Bank and Third Coast Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bank	0	2	3	1	2.83
Third Coast Bancshares	0	2	2	1	2.80

National Bank presently has a consensus price target of $44.50, suggesting a potential upside of 20.22%. Third Coast Bancshares has a consensus price target of $42.67, suggesting a potential upside of 15.49%. Given National Bank’s stronger consensus rating and higher probable upside, research analysts clearly believe National Bank is more favorable than Third Coast Bancshares.

Institutional & Insider Ownership

92.7% of National Bank shares are held by institutional investors. Comparatively, 36.9% of Third Coast Bancshares shares are held by institutional investors. 2.9% of National Bank shares are held by company insiders. Comparatively, 10.3% of Third Coast Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares National Bank and Third Coast Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bank	$599.50 million	2.34	$118.82 million	$3.16	11.71
Third Coast Bancshares	$197.80 million	2.60	$47.67 million	$3.56	10.38

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

Profitability

This table compares National Bank and Third Coast Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bank	20.50%	9.56%	1.28%
Third Coast Bancshares	16.30%	12.05%	1.17%

Dividends

National Bank pays an annual dividend of $1.20 per share and has a dividend yield of 3.2%. Third Coast Bancshares pays an annual dividend of $16.87 per share and has a dividend yield of 45.7%. National Bank pays out 38.0% of its earnings in the form of a dividend. Third Coast Bancshares pays out 473.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Bank has increased its dividend for 10 consecutive years.

Volatility & Risk

National Bank has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Third Coast Bancshares has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500.

Summary

National Bank beats Third Coast Bancshares on 12 of the 17 factors compared between the two stocks.

About National Bank

National Bank Holdings Corporation operates as the bank holding company for NBH Bank that provides various banking products and financial services to commercial, business, and consumer clients in the United States. It offers deposit products, including checking, savings, money market, and other deposit accounts, including fixed-rate and fixed maturity time deposits. The company also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, food and agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases; non-owner occupied commercial real estate loans consisting of loans on commercial properties, such as office buildings, warehouse/distribution buildings, multi-family, hospitality, and retail buildings; small business administration loans to support small businesses and entrepreneurs; term loans, line of credits, and real estate secured loans; residential real estate loans; and consumer loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. The company operates through a network of banking centers located in Colorado, the greater Kansas City region, New Mexico, Utah, Wyoming, Idaho, and Texas. It also operates ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. The company was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.

About Third Coast Bancshares

Third Coast Bancshares, Inc. operates as a bank holding company for Third Coast Bank, SSB that provides various commercial banking solutions to small and medium-sized businesses, and professionals. The company's deposit products include checking, savings, individual retirement, and money market accounts, as well as certificates of deposit. It also offers commercial and industrial loans, equipment loans, working capital lines of credit, guaranteed loans, auto finance, letters of credit, commercial and residential real estate, and construction, development, and other loans. In addition, the company provides retail and commercial online banking platforms, mobile banking apps, mortgage, treasury management solutions, merchant card services, and customer digital solutions, as well as debit and credit cards. Third Coast Bancshares, Inc. was founded in 2008 and is headquartered in Humble, Texas.