Critical Contrast: Premier Financial (NASDAQ:PFC) & Stock Yards Bancorp (NASDAQ:SYBT)

Stock Yards Bancorp (NASDAQ:SYBT) and Premier Financial (NASDAQ:PFC) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Stock Yards Bancorp and Premier Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stock Yards Bancorp	0	4	0	0	2.00
Premier Financial	0	3	1	0	2.25

Stock Yards Bancorp presently has a consensus target price of $69.25, suggesting a potential downside of 6.05%. Premier Financial has a consensus target price of $22.50, suggesting a potential downside of 19.15%. Given Stock Yards Bancorp’s higher probable upside, analysts clearly believe Stock Yards Bancorp is more favorable than Premier Financial.

Profitability

This table compares Stock Yards Bancorp and Premier Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stock Yards Bancorp	22.54%	12.71%	1.38%
Premier Financial	16.12%	7.66%	0.87%

Insider and Institutional Ownership

56.5% of Stock Yards Bancorp shares are held by institutional investors. Comparatively, 66.1% of Premier Financial shares are held by institutional investors. 3.9% of Stock Yards Bancorp shares are held by insiders. Comparatively, 2.2% of Premier Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Stock Yards Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 1.7%. Premier Financial pays an annual dividend of $1.24 per share and has a dividend yield of 4.5%. Stock Yards Bancorp pays out 31.9% of its earnings in the form of a dividend. Premier Financial pays out 62.3% 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. Stock Yards Bancorp has increased its dividend for 15 consecutive years.

Earnings and Valuation

This table compares Stock Yards Bancorp and Premier Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stock Yards Bancorp	$345.11 million	6.29	$114.54 million	$3.89	18.95
Premier Financial	$442.88 million	2.25	$71.40 million	$1.99	13.98

Stock Yards Bancorp has higher earnings, but lower revenue than Premier Financial. Premier Financial is trading at a lower price-to-earnings ratio than Stock Yards Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Stock Yards Bancorp has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, Premier Financial has a beta of 1.28, meaning that its stock price is 28% more volatile than the S&P 500.

Summary

Stock Yards Bancorp beats Premier Financial on 11 of the 17 factors compared between the two stocks.

About Stock Yards Bancorp

Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.

About Premier Financial

Premier Financial Corp., through its subsidiaries, provides various banking services. It offers demand, checking, money market, and savings accounts, as well as certificates of deposits and certificates of deposit account registry service; and investment products. The company also provides residential and commercial real estate, commercial, construction, home improvement and home equity, installment, and consumer loans. In addition, it invests in the U.S. treasury and federal government agency obligations, obligations of states and political subdivisions, mortgage-backed securities that are issued by federal agencies, residential collateralized mortgage obligations, and corporate bonds. Further, the company offers property and casualty, life, and group health insurance agency services; mezzanine funding services; and digital banking services, which include mobile banking, zelle, online bill pay, and online account opening, as well as the MoneyPass ATM network. It operates in Ohio, Michigan, Indiana, Pennsylvania, and West Virginia. The company was formerly known as First Defiance Financial Corp. and changed its name to Premier Financial Corp. in June 2020. Premier Financial Corp. was founded in 1920 and is headquartered in Defiance, Ohio.