Contrasting Sierra Bancorp (NASDAQ:BSRR) and Red River Bancshares (NASDAQ:RRBI)
by Teresa Graham · The Cerbat GemRed River Bancshares (NASDAQ:RRBI – Get Free Report) and Sierra Bancorp (NASDAQ:BSRR – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.
Valuation and Earnings
This table compares Red River Bancshares and Sierra Bancorp”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Red River Bancshares | $169.85 million | 4.01 | $42.76 million | $7.22 | 14.34 |
| Sierra Bancorp | $201.98 million | 2.66 | $42.33 million | $3.88 | 10.68 |
Red River Bancshares has higher earnings, but lower revenue than Sierra Bancorp. Sierra Bancorp is trading at a lower price-to-earnings ratio than Red River Bancshares, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent recommendations for Red River Bancshares and Sierra Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Red River Bancshares | 0 | 3 | 0 | 1 | 2.50 |
| Sierra Bancorp | 0 | 3 | 2 | 1 | 2.67 |
Red River Bancshares currently has a consensus price target of $115.00, suggesting a potential upside of 11.06%. Sierra Bancorp has a consensus price target of $43.83, suggesting a potential upside of 5.83%. Given Red River Bancshares’ higher possible upside, equities analysts clearly believe Red River Bancshares is more favorable than Sierra Bancorp.
Risk and Volatility
Red River Bancshares has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500. Comparatively, Sierra Bancorp has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.
Profitability
This table compares Red River Bancshares and Sierra Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Red River Bancshares | 26.86% | 12.75% | 1.43% |
| Sierra Bancorp | 25.32% | 13.89% | 1.35% |
Dividends
Red River Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Sierra Bancorp pays an annual dividend of $1.08 per share and has a dividend yield of 2.6%. Red River Bancshares pays out 13.9% of its earnings in the form of a dividend. Sierra Bancorp pays out 27.8% 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. Red River Bancshares has increased its dividend for 3 consecutive years and Sierra Bancorp has increased its dividend for 2 consecutive years.
Institutional & Insider Ownership
27.6% of Red River Bancshares shares are held by institutional investors. Comparatively, 55.4% of Sierra Bancorp shares are held by institutional investors. 16.6% of Red River Bancshares shares are held by insiders. Comparatively, 11.8% of Sierra Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Summary
Red River Bancshares beats Sierra Bancorp on 10 of the 17 factors compared between the two stocks.
About Red River Bancshares
Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.
About Sierra Bancorp
Sierra Bancorp operates as the bank holding company for Bank of the Sierra that provides retail and commercial banking services to individuals and businesses in California. It accepts various deposit products, such as checking accounts, savings accounts, money market demand accounts, time deposits, retirement accounts, and sweep accounts. The company's loan products include agricultural, commercial, consumer, real estate, construction, and mortgage loans. It also offers automated teller machines; electronic point-of-sale payment alternatives; online and automated telephone banking services; and remote deposit capture and automated payroll services for business customers. Sierra Bancorp was founded in 1977 and is headquartered in Porterville, California.