Critical Review: Truxton (OTCMKTS:TRUX) & Third Coast Bancshares (NASDAQ:TCBX)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Truxton	24.00%	N/A	N/A
Third Coast Bancshares	16.30%	12.05%	1.17%

Dividends

Truxton pays an annual dividend of $3.52 per share and has a dividend yield of 3.5%. Third Coast Bancshares pays an annual dividend of $16.87 per share and has a dividend yield of 45.4%. Truxton pays out 43.8% of its earnings in the form of a dividend. Third Coast Bancshares pays out 433.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Truxton and Third Coast Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Truxton	0	0	0	0	0.00
Third Coast Bancshares	0	2	3	0	2.60

Third Coast Bancshares has a consensus target price of $45.00, suggesting a potential upside of 20.98%. Given Third Coast Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Third Coast Bancshares is more favorable than Truxton.

Earnings and Valuation

This table compares Truxton and Third Coast Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Truxton	$92.29 million	3.16	$21.48 million	$8.04	12.56
Third Coast Bancshares	$219.24 million	2.81	$47.67 million	$3.89	9.56

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

Institutional and Insider Ownership

0.3% of Truxton shares are owned by institutional investors. Comparatively, 36.9% of Third Coast Bancshares shares are owned by institutional investors. 10.3% of Third Coast Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Truxton has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Third Coast Bancshares has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Summary

Third Coast Bancshares beats Truxton on 10 of the 16 factors compared between the two stocks.

About Truxton

Truxton Corporation, through its subsidiaries, provides various banking, investment management, and trust administration services to individuals, businesses, and charitable institutions in the United States. The company offers deposit products, including demand, money market accounts, and certificates of deposit. It also provides lending products, such as residential and commercial real estate mortgages, commercial loans, construction and land development loans, commercial and industrial loans, operating lines of credit, and loans to individual. In addition, the company offers strategic and capital advisory services, business banking, and treasury management services; and insurance products. The company was formerly known as NBT Holdings Inc. and changed its name to Truxton Corporation in May 2013. Truxton Corporation was founded in 2004 and is based in Nashville, Tennessee.

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.