Truist Financial (NYSE:TFC – Get Free Report) and Simmons First National (NASDAQ:SFNC – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.
Dividends
Truist Financial pays an annual dividend of $2.08 per share and has a dividend yield of 5.5%. Simmons First National pays an annual dividend of $0.84 per share and has a dividend yield of 4.9%. Truist Financial pays out -157.6% of its earnings in the form of a dividend. Simmons First National pays out 63.2% 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. Truist Financial has increased its dividend for 13 consecutive years and Simmons First National has increased its dividend for 13 consecutive years. Truist Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional and Insider Ownership
71.3% of Truist Financial shares are owned by institutional investors. Comparatively, 27.6% of Simmons First National shares are owned by institutional investors. 0.2% of Truist Financial shares are owned by company insiders. Comparatively, 1.9% of Simmons First National shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Truist Financial and Simmons First National’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Truist Financial | -4.28% | 9.15% | 0.92% |
| Simmons First National | 11.97% | 5.94% | 0.73% |
Analyst Recommendations
This is a summary of recent ratings and target prices for Truist Financial and Simmons First National, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Truist Financial | 0 | 7 | 10 | 0 | 2.59 |
| Simmons First National | 0 | 3 | 0 | 0 | 2.00 |
Truist Financial presently has a consensus price target of $43.17, indicating a potential upside of 14.37%. Simmons First National has a consensus price target of $21.00, indicating a potential upside of 22.02%. Given Simmons First National’s higher probable upside, analysts plainly believe Simmons First National is more favorable than Truist Financial.
Valuation and Earnings
This table compares Truist Financial and Simmons First National’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Truist Financial | $33.25 billion | 1.52 | -$1.09 billion | ($1.32) | -28.60 |
| Simmons First National | $1.37 billion | 1.58 | $175.06 million | $1.33 | 12.94 |
Simmons First National has lower revenue, but higher earnings than Truist Financial. Truist Financial is trading at a lower price-to-earnings ratio than Simmons First National, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Truist Financial has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, Simmons First National has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.
Summary
Truist Financial beats Simmons First National on 9 of the 16 factors compared between the two stocks.
About Truist Financial
Truist Financial Corporation, a financial services company, provides banking and trust services in the Southeastern and Mid-Atlantic United States. The company operates through three segments: Consumer Banking and Wealth, Corporate and Commercial Banking, and Insurance Holdings.Its deposit products include noninterest-bearing checking, interest-bearing checking, savings, and money market deposit accounts, as well as certificates of deposit and individual retirement accounts. The company also provides funding; asset management; automobile lending; credit card lending; consumer finance; home equity and mortgage lending; other direct retail lending; insurance; investment brokerage; mobile/online banking; payment solutions; point-of-sale lending; retail and small business deposit products; small business lending; and wealth management/private banking services. In addition, it offers asset based lending, investment banking and capital market, institutional trust, insurance premium finance, derivatives, commercial lending, international banking, leasing, merchant, commercial deposit and treasury, floor plan, mortgage warehouse lending, real estate lending, and supply chain financing services. Further, the company provides insurance brokerage, retail and wholesale brokerage, securities underwriting and market making, loan syndication, and investment management and advisory services. The company was formerly known as BB&T Corporation and changed its name to Truist Financial Corporation in December 2019. Truist Financial Corporation was founded in 1872 and is headquartered in Charlotte, North Carolina.
About Simmons First National
Simmons First National Corporation operates as the holding company for Simmons Bank that provides banking and other financial products and services to individuals and businesses. The company offers checking, savings, and time deposits; consumer, real estate, and commercial loans; agricultural finance, equipment, and small business administration lending; trust and fiduciary services; credit cards; investment management products; treasury management; insurance products; and securities and investment services. It also provides ATM services; Internet and mobile banking platforms; overdraft facilities; and safe deposit boxes. The company was founded in 1903 and is headquartered in Pine Bluff, Arkansas.
Receive News & Ratings for Truist Financial Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for Truist Financial and related companies with MarketBeat.com’s FREE daily email newsletter.
Source: defenseworld.net
