Analyzing QNB (OTCMKTS:QNBC) and South Plains Financial (NASDAQ:SPFI)

QNB (OTCMKTS:QNBC) and South Plains Financial (NASDAQ:SPFI) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, profitability, valuation, dividends and risk.

Volatility & Risk

QNB has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, South Plains Financial has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Valuation & Earnings

This table compares QNB and South Plains Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QNB	$73.92 million	1.60	$9.48 million	$2.60	12.30
South Plains Financial	$181.76 million	3.53	$62.74 million	$2.57	15.23

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

Institutional and Insider Ownership

0.7% of QNB shares are held by institutional investors. Comparatively, 55.0% of South Plains Financial shares are held by institutional investors. 16.0% of QNB shares are held by insiders. Comparatively, 25.4% of South Plains Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

QNB pays an annual dividend of $1.48 per share and has a dividend yield of 4.6%. South Plains Financial pays an annual dividend of $0.60 per share and has a dividend yield of 1.5%. QNB pays out 56.9% of its earnings in the form of a dividend. South Plains Financial pays out 23.3% 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.

Analyst Ratings

This is a summary of current ratings and target prices for QNB and South Plains Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QNB	0	0	0	0	0.00
South Plains Financial	0	0	3	0	3.00

South Plains Financial has a consensus price target of $36.00, suggesting a potential downside of 8.00%. Given South Plains Financial’s stronger consensus rating and higher possible upside, analysts plainly believe South Plains Financial is more favorable than QNB.

Profitability

This table compares QNB and South Plains Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QNB	11.00%	10.16%	0.55%
South Plains Financial	15.51%	10.39%	1.03%

Summary

South Plains Financial beats QNB on 14 of the 16 factors compared between the two stocks.

About QNB

QNB Corp. operates as the bank holding company for QNB Bank that engages in the provision of commercial and retail banking products, and retail brokerage services. It offers various deposit products, which include demand and savings accounts, such as money market, interest-bearing demand, club, traditional statement savings, and online savings accounts; and time deposits comprising certificates of deposit and individual retirement accounts. The company also provides commercial and industrial loans, commercial and residential real estate loans, construction and land development loans, indirect lease financing, 1-4 family residential mortgage loans, home equity loans and lines of credit, and consumer loans. In addition, it offers retail brokerage and advisory services; credit cards and insurance products; merchant services; ATM and debit card services; and internet and mobile-banking, electronic bill pay, and remote deposit capture services. The company serves other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies, and brokerage companies. QNB Corp. was founded in 1877 and is based in Quakertown, Pennsylvania.

About South Plains Financial

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.