Investar (NASDAQ:ISTR) and Third Coast Bancshares (NASDAQ:TCBX) Head-To-Head Survey
by Mitch Edgeman · The Markets DailyThird Coast Bancshares (NASDAQ:TCBX – Get Free Report) and Investar (NASDAQ:ISTR – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, risk, analyst recommendations and institutional ownership.
Profitability
This table compares Third Coast Bancshares and Investar’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Third Coast Bancshares | 16.30% | 12.05% | 1.17% |
| Investar | 14.92% | 9.20% | 0.86% |
Analyst Ratings
This is a summary of recent ratings and recommmendations for Third Coast Bancshares and Investar, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Third Coast Bancshares | 0 | 2 | 2 | 1 | 2.80 |
| Investar | 0 | 1 | 1 | 1 | 3.00 |
Third Coast Bancshares currently has a consensus price target of $45.50, indicating a potential upside of 24.81%. Investar has a consensus price target of $29.00, indicating a potential upside of 7.85%. Given Third Coast Bancshares’ higher possible upside, research analysts plainly believe Third Coast Bancshares is more favorable than Investar.
Dividends
Third Coast Bancshares pays an annual dividend of $16.87 per share and has a dividend yield of 46.3%. Investar pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. Third Coast Bancshares pays out 445.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Investar pays out 20.6% of its earnings in the form of a dividend. Investar has raised its dividend for 10 consecutive years.
Earnings and Valuation
This table compares Third Coast Bancshares and Investar”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Third Coast Bancshares | $207.74 million | 2.89 | $47.67 million | $3.79 | 9.62 |
| Investar | $90.24 million | 2.92 | $22.90 million | $2.14 | 12.57 |
Third Coast Bancshares has higher revenue and earnings than Investar. Third Coast Bancshares is trading at a lower price-to-earnings ratio than Investar, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
36.9% of Third Coast Bancshares shares are owned by institutional investors. Comparatively, 50.2% of Investar shares are owned by institutional investors. 10.3% of Third Coast Bancshares shares are owned by insiders. Comparatively, 8.8% of Investar shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Risk & Volatility
Third Coast Bancshares has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Investar has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.
Summary
Third Coast Bancshares beats Investar on 10 of the 17 factors compared between the two stocks.
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.
About Investar
Investar Holding Corporation operates as the bank holding company for Investar Bank that provides a range of commercial banking products to individuals, professionals, and small to medium-sized businesses in south Louisiana, southeast Texas, and Alabama in the United States. The company offers various deposit products and services, such as savings, checking, money market, and individual retirement accounts, as well as various certificates of deposit; debit and credit cards; internet, mobile, and video banking services; and reciprocal deposit products. It also provides commercial real estate loans; commercial and industrial loans, including working capital lines of credit and equipment loans; loans for the construction of commercial projects, and single family residential and multifamily properties; one-to-four family residential real estate loans, such as second mortgage loans; and consumer loans, such as secured and unsecured installment and term loans, home equity loans and lines of credit, and auto loans, as well as loans for personal, family, and household purposes. In addition, the company offers treasury management products, including remote deposit capture, lockbox payment processing, virtual vault, positive pay, ACH origination, wire transfer, investment sweep accounts, and business internet banking services. Further, it provides various other banking services, such as cashiers' checks, direct deposit of payroll and social security checks, night depository, bank-by-mail, automated teller machines, electronic statements, interactive teller machines, online account opening, and mobile wallet payment services. Investar Holding Corporation was founded in 2006 and is headquartered in Baton Rouge, Louisiana.