Provident Financial (NASDAQ:PROV – Get Free Report) and ServisFirst Bancshares (NYSE:SFBS – Get Free Report) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.
Profitability
This table compares Provident Financial and ServisFirst Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Provident Financial | 11.16% | 5.23% | 0.54% |
| ServisFirst Bancshares | 30.95% | 17.42% | 1.82% |
Analyst Recommendations
This is a summary of recent recommendations and price targets for Provident Financial and ServisFirst Bancshares, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Provident Financial | 0 | 2 | 0 | 1 | 2.67 |
| ServisFirst Bancshares | 0 | 1 | 3 | 1 | 3.00 |
Dividends
Provident Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.0%. ServisFirst Bancshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.8%. Provident Financial pays out 54.4% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 25.9% 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. ServisFirst Bancshares has raised its dividend for 10 consecutive years.
Risk & Volatility
Provident Financial has a beta of 0.33, meaning that its share price is 67% less volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.
Institutional & Insider Ownership
71.3% of Provident Financial shares are held by institutional investors. Comparatively, 67.3% of ServisFirst Bancshares shares are held by institutional investors. 11.5% of Provident Financial shares are held by company insiders. Comparatively, 6.5% of ServisFirst Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Provident Financial and ServisFirst Bancshares”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Provident Financial | $59.62 million | 1.93 | $6.66 million | $1.03 | 17.96 |
| ServisFirst Bancshares | $1.02 billion | 4.43 | $276.60 million | $2.93 | 14.07 |
ServisFirst Bancshares has higher revenue and earnings than Provident Financial. ServisFirst Bancshares is trading at a lower price-to-earnings ratio than Provident Financial, indicating that it is currently the more affordable of the two stocks.
Summary
ServisFirst Bancshares beats Provident Financial on 13 of the 17 factors compared between the two stocks.
About Provident Financial
Provident Financial Holdings, Inc. operates as the holding company for Provident Savings Bank, F.S.B. that provides community banking services to consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The company's deposit products include checking, savings, and money market accounts, as well as time deposits; and loan portfolio consists of single-family, multi-family, commercial real estate, construction, mortgage, commercial business, and consumer loans. It also offers investment services comprising the sale of investment products, such as annuities and mutual funds; and trustee services for real estate transactions. The company operates through full-service banking offices in Riverside County and San Bernardino County. Provident Financial Holdings, Inc. was founded in 1956 and is headquartered in Riverside, California.
About ServisFirst Bancshares
ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.
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