Critical Analysis: Peoples Financial (OTCMKTS:PFBX) vs. Byline Bancorp (NYSE:BY)

Byline Bancorp (NYSE:BY) and Peoples Financial (OTCMKTS:PFBX) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Dividends

Byline Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 1.3%. Peoples Financial pays an annual dividend of $0.36 per share and has a dividend yield of 2.0%. Byline Bancorp pays out 13.2% of its earnings in the form of a dividend. Peoples Financial pays out 18.8% 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

67.7% of Byline Bancorp shares are held by institutional investors. Comparatively, 32.8% of Peoples Financial shares are held by institutional investors. 30.1% of Byline Bancorp shares are held by company insiders. Comparatively, 28.1% of Peoples Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Byline Bancorp and Peoples Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Byline Bancorp	19.42%	12.69%	1.36%
Peoples Financial	20.91%	12.26%	0.99%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Byline Bancorp and Peoples Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Byline Bancorp	0	2	2	0	2.50
Peoples Financial	0	0	0	0	N/A

Byline Bancorp presently has a consensus target price of $29.88, indicating a potential upside of 7.66%. Given Byline Bancorp’s higher possible upside, analysts plainly believe Byline Bancorp is more favorable than Peoples Financial.

Valuation & Earnings

This table compares Byline Bancorp and Peoples Financial’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Byline Bancorp	$535.79 million	2.29	$107.88 million	$2.73	10.16
Peoples Financial	$39.52 million	2.10	$9.17 million	$1.92	9.27

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

Volatility & Risk

Byline Bancorp has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Peoples Financial has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.

Summary

Byline Bancorp beats Peoples Financial on 13 of the 15 factors compared between the two stocks.

About Byline Bancorp

Byline Bancorp, Inc. operates as the bank holding company for Byline Bank that provides various banking products and services for small and medium sized businesses, commercial real estate and financial sponsors, and consumers in the United States. It offers various retail deposit products, including non-interest-bearing accounts, money market demand accounts, savings accounts, interest-bearing checking accounts, and time deposits; ATM and debit cards; and online, mobile, and text banking services, as well as commercial deposits. The company also provides term loans, revolving lines of credit, and construction financing services; senior secured financing solutions to private equity backed lower middle market companies; small business administration and united states department of agriculture loans; and treasury management products and services. In addition, it offers financing solutions for equipment vendors and their end users; syndication services; and investment, trust, and wealth management services that include fiduciary and executor services, financial planning solutions, investment advisory services, and private banking services for foundations and endowments, and high net worth individuals. The company was formerly known as Metropolitan Bank Group, Inc. and changed its name to Byline Bancorp, Inc. in 2015. Byline Bancorp, Inc. was founded in 1914 and is headquartered in Chicago, Illinois.

About Peoples Financial

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. The company accepts various deposits, such as interest and non-interest-bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). It offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, the company provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, it offers other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and Internet banking services. the company provides services to customers of various industries, such as seafood, retail, hospitality, hotel/motel, gaming, and construction. Peoples Financial Corporation was founded in 1896 and is headquartered in Biloxi, Mississippi.