Financial Analysis: Hancock Whitney (NASDAQ:HWC) versus Sierra Bancorp (NASDAQ:BSRR)

Sierra Bancorp (NASDAQ:BSRR) and Hancock Whitney (NASDAQ:HWC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Institutional & Insider Ownership

55.4% of Sierra Bancorp shares are held by institutional investors. Comparatively, 81.2% of Hancock Whitney shares are held by institutional investors. 11.9% of Sierra Bancorp shares are held by company insiders. Comparatively, 1.1% of Hancock Whitney shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Sierra Bancorp has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Hancock Whitney has a beta of 1.27, indicating that its stock price is 27% more volatile than the S&P 500.

Profitability

This table compares Sierra Bancorp and Hancock Whitney’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sierra Bancorp	17.91%	10.48%	1.00%
Hancock Whitney	19.30%	11.47%	1.28%

Valuation and Earnings

This table compares Sierra Bancorp and Hancock Whitney”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sierra Bancorp	$125.24 million	3.40	$34.84 million	$2.52	11.75
Hancock Whitney	$1.37 billion	3.48	$392.60 million	$4.46	12.39

Hancock Whitney has higher revenue and earnings than Sierra Bancorp. Sierra Bancorp is trading at a lower price-to-earnings ratio than Hancock Whitney, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for Sierra Bancorp and Hancock Whitney, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sierra Bancorp	0	2	0	0	2.00
Hancock Whitney	0	2	6	1	2.89

Sierra Bancorp presently has a consensus target price of $29.00, suggesting a potential downside of 2.03%. Hancock Whitney has a consensus target price of $58.00, suggesting a potential upside of 4.96%. Given Hancock Whitney’s stronger consensus rating and higher possible upside, analysts clearly believe Hancock Whitney is more favorable than Sierra Bancorp.

Dividends

Sierra Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 3.2%. Hancock Whitney pays an annual dividend of $1.60 per share and has a dividend yield of 2.9%. Sierra Bancorp pays out 38.1% of its earnings in the form of a dividend. Hancock Whitney pays out 35.9% 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.

Summary

Hancock Whitney beats Sierra Bancorp on 15 of the 17 factors compared between the two stocks.

About Sierra Bancorp

Sierra Bancorp operates as the bank holding company for Bank of the Sierra that provides retail and commercial banking services to individuals and businesses in California. It accepts various deposit products, such as checking accounts, savings accounts, money market demand accounts, time deposits, retirement accounts, and sweep accounts. The company's loan products include agricultural, commercial, consumer, real estate, construction, and mortgage loans. It also offers automated teller machines; electronic point-of-sale payment alternatives; online and automated telephone banking services; and remote deposit capture and automated payroll services for business customers. Sierra Bancorp was founded in 1977 and is headquartered in Porterville, California.

About Hancock Whitney

Hancock Whitney Corporation operates as the financial holding company for Hancock Whitney Bank that provides traditional and online banking services to commercial, small business, and retail customers. It offers various transaction and savings deposit products consisting of brokered deposits, time deposits, and money market accounts; treasury management services, secured and unsecured loan products including revolving credit facilities, and letters of credit and similar financial guarantees; and trust and investment management services to retirement plans, corporations, and individuals, and investment advisory and brokerage products. The company also provides commercial and industrial loans including real and non-real estate loans; construction and land development loans; and residential mortgages, as well as consumer loans. In addition, it offers commercial finance products to middle market and corporate clients, including leases and related structures; facilitates investments in new market tax credit activities and holding certain foreclosed assets; provides customers access to fixed annuity and life insurance products; and underwriting transactions products, as well as debt and mortgage-related securities. The company was founded in 1899 and is headquartered in Gulfport, Mississippi.