ServisFirst Bancshares (NYSE:SFBS) & VersaBank (NASDAQ:VBNK) Head to Head Analysis
by Mitch Edgeman · The Markets DailyVersaBank (NASDAQ:VBNK – Get Free Report) and ServisFirst Bancshares (NYSE:SFBS – Get Free Report) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.
Valuation & Earnings
This table compares VersaBank and ServisFirst Bancshares”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| VersaBank | $217.14 million | 3.25 | $20.32 million | $0.76 | 28.57 |
| ServisFirst Bancshares | $656.01 million | 6.90 | $276.60 million | $3.13 | 13.23 |
ServisFirst Bancshares has higher revenue and earnings than VersaBank. ServisFirst Bancshares is trading at a lower price-to-earnings ratio than VersaBank, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
VersaBank has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.
Dividends
VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.3%. ServisFirst Bancshares pays an annual dividend of $0.76 per share and has a dividend yield of 1.8%. VersaBank pays out 9.2% of its earnings in the form of a dividend. ServisFirst Bancshares pays out 24.3% 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 increased its dividend for 10 consecutive years. ServisFirst Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a breakdown of recent ratings and target prices for VersaBank and ServisFirst Bancshares, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| VersaBank | 0 | 1 | 3 | 0 | 2.75 |
| ServisFirst Bancshares | 1 | 0 | 4 | 0 | 2.60 |
VersaBank presently has a consensus target price of $24.00, suggesting a potential upside of 10.55%. ServisFirst Bancshares has a consensus target price of $46.50, suggesting a potential upside of 12.31%. Given ServisFirst Bancshares’ higher probable upside, analysts plainly believe ServisFirst Bancshares is more favorable than VersaBank.
Institutional & Insider Ownership
56.9% of VersaBank shares are held by institutional investors. Comparatively, 67.3% of ServisFirst Bancshares shares are held by institutional investors. 6.5% of ServisFirst Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Profitability
This table compares VersaBank and ServisFirst Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| VersaBank | 9.92% | 8.66% | 0.75% |
| ServisFirst Bancshares | 32.53% | 17.66% | 1.89% |
Summary
ServisFirst Bancshares beats VersaBank on 13 of the 17 factors compared between the two stocks.
About VersaBank
VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.
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.