Reviewing Bank OZK (NASDAQ:OZK) & Five Star Bancorp (NASDAQ:FSBC)

Bank OZK (NASDAQ:OZK) and Five Star Bancorp (NASDAQ:FSBC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Bank OZK and Five Star Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank OZK	1	7	1	0	2.00
Five Star Bancorp	0	1	3	0	2.75

Bank OZK currently has a consensus target price of $50.38, indicating a potential upside of 15.94%. Five Star Bancorp has a consensus target price of $36.38, indicating a potential upside of 30.85%. Given Five Star Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Five Star Bancorp is more favorable than Bank OZK.

Dividends

Bank OZK pays an annual dividend of $1.68 per share and has a dividend yield of 3.9%. Five Star Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. Bank OZK pays out 27.4% of its earnings in the form of a dividend. Five Star Bancorp pays out 35.1% 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. Bank OZK has raised its dividend for 29 consecutive years. Bank OZK is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

86.2% of Bank OZK shares are owned by institutional investors. Comparatively, 46.9% of Five Star Bancorp shares are owned by institutional investors. 6.7% of Bank OZK shares are owned by company insiders. Comparatively, 25.6% of Five Star Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Bank OZK and Five Star Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank OZK	$1.66 billion	2.97	$716.46 million	$6.14	7.08
Five Star Bancorp	$124.96 million	4.75	$45.67 million	$2.28	12.19

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

Profitability

This table compares Bank OZK and Five Star Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank OZK	25.83%	13.90%	1.93%
Five Star Bancorp	21.40%	12.89%	1.25%

Volatility and Risk

Bank OZK has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Five Star Bancorp has a beta of 0.48, meaning that its stock price is 52% less volatile than the S&P 500.

Summary

Bank OZK beats Five Star Bancorp on 11 of the 17 factors compared between the two stocks.

About Bank OZK

Bank OZK provides various retail and commercial banking services for individuals and businesses in the United States. The company offers deposit services, including non-interest bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement, and other accounts, as well as time and reciprocal deposits. It also provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts, and retirement accounts, as well as corporate trust services, including trustee, paying agent and registered transfer agent services, and other related services. In addition, the company offers treasury management services comprising automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, commercial card, and other services, as well as zero balance and investment sweep accounts. Further, it provides real estate, consumer, small business, indirect recreational vehicle and marine, equipment, agricultural, commercial and industrial, government guaranteed, lines of credit, homebuilder, and affordable housing loans; lender and structured, business aviation, and subscription financing services; and mortgage and other lending products. Additionally, the company offers ATMs; telephone, online, and mobile banking services; credit and debit cards; safe deposit boxes; and other products and services. The company was formerly known as Bank of the Ozarks and changed its name to Bank OZK in July 2018. Bank OZK was founded in 1903 and is headquartered in Little Rock, Arkansas.

About Five Star Bancorp

Five Star Bancorp operates as the bank holding company for Five Star Bank that provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in Northern California. It accepts various deposits, such as money market accounts, noninterest-bearing and interest checking accounts, savings accounts, term certificate accounts, and time deposits. The company also offers loan products, including commercial and residential real estate loans; commercial loans; commercial land loans; farmland loans; commercial and residential construction loans; and consumer and other loans, as well as operating lines of credit. In addition, it provides debit cards; and remote deposit capture, online and mobile banking, and direct deposit services. Five Star Bancorp was founded in 1999 and is headquartered in Rancho Cordova, California.