Reviewing Business First Bancshares (NASDAQ:BFST) & Carter Bankshares (NASDAQ:CARE)
by Tristan Rich · The Markets DailyCarter Bankshares (NASDAQ:CARE – Get Free Report) and Business First Bancshares (NASDAQ:BFST – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.
Valuation and Earnings
This table compares Carter Bankshares and Business First Bancshares”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Carter Bankshares | $214.28 million | 3.12 | $31.00 million | $5.81 | 5.19 |
| Business First Bancshares | $516.55 million | 1.99 | $87.86 million | $2.82 | 11.20 |
Business First Bancshares has higher revenue and earnings than Carter Bankshares. Carter Bankshares is trading at a lower price-to-earnings ratio than Business First Bancshares, indicating that it is currently the more affordable of the two stocks.
Dividends
Carter Bankshares pays an annual dividend of $0.40 per share and has a dividend yield of 1.3%. Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. Carter Bankshares pays out 6.9% of its earnings in the form of a dividend. Business First Bancshares pays out 21.3% 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. Business First Bancshares has increased its dividend for 2 consecutive years. Business First Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
41.5% of Carter Bankshares shares are held by institutional investors. Comparatively, 47.4% of Business First Bancshares shares are held by institutional investors. 2.4% of Carter Bankshares shares are held by insiders. Comparatively, 5.7% of Business First Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Analyst Ratings
This is a summary of recent recommendations for Carter Bankshares and Business First Bancshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Carter Bankshares | 0 | 4 | 1 | 0 | 2.20 |
| Business First Bancshares | 0 | 0 | 5 | 0 | 3.00 |
Carter Bankshares presently has a consensus target price of $30.75, suggesting a potential upside of 1.89%. Business First Bancshares has a consensus target price of $34.75, suggesting a potential upside of 10.07%. Given Business First Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Business First Bancshares is more favorable than Carter Bankshares.
Volatility and Risk
Carter Bankshares has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, Business First Bancshares has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.
Profitability
This table compares Carter Bankshares and Business First Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Carter Bankshares | 36.79% | 7.46% | 0.73% |
| Business First Bancshares | 17.07% | 11.03% | 1.13% |
Summary
Business First Bancshares beats Carter Bankshares on 13 of the 17 factors compared between the two stocks.
About Carter Bankshares
Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.
About Business First Bancshares
Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services in Louisiana and Texas. It offers various deposit products and services, including checking, demand, money market, time, and savings accounts; and certificates of deposits, remote deposit capture, and direct deposit services. The company also provides commercial and industrial loans, such as working capital, term, equipment financing, asset acquisition, expansion and development, borrowing base, and other loan products, as well as commercial lines of credit, accounts receivable factoring, agricultural financing, and letters of credit; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien 1-4 family mortgage loans, and home equity lines of credit; and consumer loans, including secured and unsecured installment, and term loans. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products, as well as other fiduciary and private banking products and services. Further, the company provides a range of other financial services comprising debit and credit cards, treasury and cash management, merchant, automated clearing house, lock-box, receivables factoring, correspondent banking, and other treasury services, as well as employee and payroll benefits solutions; and drive-through banking facilities, automated teller machines, night depository, personalized checks, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, online and mobile banking, e-statements, and bank-by-mail services. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.