Head-To-Head Analysis: QNB (OTCMKTS:QNBC) vs. South Plains Financial (NASDAQ:SPFI)

South Plains Financial (NASDAQ:SPFI) and QNB (OTCMKTS:QNBC) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, earnings, risk, valuation, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for South Plains Financial and QNB, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Plains Financial	0	0	3	0	3.00
QNB	0	0	0	0	0.00

South Plains Financial presently has a consensus target price of $36.00, suggesting a potential downside of 9.73%. Given South Plains Financial’s stronger consensus rating and higher probable upside, equities analysts plainly believe South Plains Financial is more favorable than QNB.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
South Plains Financial	15.51%	10.39%	1.03%
QNB	11.00%	10.16%	0.55%

Dividends

South Plains Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.5%. QNB pays an annual dividend of $1.48 per share and has a dividend yield of 4.6%. South Plains Financial pays out 23.3% of its earnings in the form of a dividend. QNB pays out 56.9% 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.

Institutional & Insider Ownership

55.0% of South Plains Financial shares are owned by institutional investors. Comparatively, 0.7% of QNB shares are owned by institutional investors. 25.4% of South Plains Financial shares are owned by company insiders. Comparatively, 16.0% of QNB shares are owned by company 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

South Plains Financial has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, QNB has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Valuation and Earnings

This table compares South Plains Financial and QNB”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Plains Financial	$181.76 million	3.60	$62.74 million	$2.57	15.52
QNB	$73.92 million	1.60	$9.48 million	$2.60	12.31

South Plains Financial has higher revenue and earnings than QNB. QNB 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.

Summary

South Plains Financial beats QNB on 14 of the 16 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 QNB

QNB Corp. operates as the bank holding company for QNB Bank that engages in the provision of commercial and retail banking products, and retail brokerage services. It offers various deposit products, which include demand and savings accounts, such as money market, interest-bearing demand, club, traditional statement savings, and online savings accounts; and time deposits comprising certificates of deposit and individual retirement accounts. The company also provides commercial and industrial loans, commercial and residential real estate loans, construction and land development loans, indirect lease financing, 1-4 family residential mortgage loans, home equity loans and lines of credit, and consumer loans. In addition, it offers retail brokerage and advisory services; credit cards and insurance products; merchant services; ATM and debit card services; and internet and mobile-banking, electronic bill pay, and remote deposit capture services. The company serves other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies, and brokerage companies. QNB Corp. was founded in 1877 and is based in Quakertown, Pennsylvania.