Comparing Truist Financial (NYSE:TFC) & South Plains Financial (NASDAQ:SPFI)

South Plains Financial (NASDAQ:SPFI) and Truist Financial (NYSE:TFC) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Earnings and Valuation

This table compares South Plains Financial and Truist Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Plains Financial	$296.89 million	2.80	$58.47 million	$3.67	12.00
Truist Financial	$30.44 billion	1.93	$5.31 billion	$4.36	11.02

Truist Financial has higher revenue and earnings than South Plains Financial. Truist Financial is trading at a lower price-to-earnings ratio than South Plains Financial, indicating that it is currently the more affordable of the two stocks.

Dividends

South Plains Financial pays an annual dividend of $0.72 per share and has a dividend yield of 1.6%. Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 4.3%. South Plains Financial pays out 19.6% of its earnings in the form of a dividend. Truist Financial pays out 47.7% 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. South Plains Financial has increased its dividend for 5 consecutive years.

Volatility & Risk

South Plains Financial has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, Truist Financial has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for South Plains Financial and Truist Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Plains Financial	0	1	6	0	2.86
Truist Financial	2	8	7	0	2.29

South Plains Financial presently has a consensus price target of $49.60, suggesting a potential upside of 12.60%. Truist Financial has a consensus price target of $55.12, suggesting a potential upside of 14.74%. Given Truist Financial’s higher possible upside, analysts clearly believe Truist Financial is more favorable than South Plains Financial.

Insider and Institutional Ownership

54.9% of South Plains Financial shares are held by institutional investors. Comparatively, 71.3% of Truist Financial shares are held by institutional investors. 24.3% of South Plains Financial shares are held by company insiders. Comparatively, 0.2% of Truist Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares South Plains Financial and Truist Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Plains Financial	20.79%	12.36%	1.37%
Truist Financial	19.13%	10.06%	1.09%

Summary

South Plains Financial beats Truist Financial on 9 of the 17 factors compared between the two stocks.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.

About Truist Financial

Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.