Head to Head Contrast: Sterling Bancorp (STL) and American National Bankshares (AMNB)

Sterling Bancorp (NYSE: STL) and American National Bankshares (NASDAQ:AMNB) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Dividends

Sterling Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.1%. American National Bankshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. Sterling Bancorp pays out 20.0% of its earnings in the form of a dividend. American National Bankshares pays out 48.3% 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 breakdown of current ratings and target prices for Sterling Bancorp and American National Bankshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sterling Bancorp 0 1 4 0 2.80
American National Bankshares 0 3 0 0 2.00

Sterling Bancorp currently has a consensus price target of $30.97, suggesting a potential upside of 26.31%. American National Bankshares has a consensus price target of $39.00, suggesting a potential downside of 0.64%. Given Sterling Bancorp’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Sterling Bancorp is more favorable than American National Bankshares.

Profitability

This table compares Sterling Bancorp and American National Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sterling Bancorp 16.84% 9.24% 1.21%
American National Bankshares 21.43% 9.42% 1.10%

Institutional and Insider Ownership

88.8% of Sterling Bancorp shares are held by institutional investors. Comparatively, 33.8% of American National Bankshares shares are held by institutional investors. 2.1% of Sterling Bancorp shares are held by insiders. Comparatively, 5.9% of American National Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Sterling Bancorp has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, American National Bankshares has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Valuation & Earnings

This table compares Sterling Bancorp and American National Bankshares’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sterling Bancorp $746.65 million 7.40 $93.03 million $1.40 17.51
American National Bankshares $77.26 million 4.41 $15.24 million $2.07 18.96

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

Summary

Sterling Bancorp beats American National Bankshares on 10 of the 16 factors compared between the two stocks.

Sterling Bancorp Company Profile

Sterling Bancorp operates as the bank holding company for Sterling National Bank that provides various banking services to commercial, consumer, and municipal clients in the United States. The company accepts deposit products, including checking, money market, savings, time, and interest and non-interest bearing demand deposits, as well as certificates of deposit and mortgage escrow funds. It originates various loans that comprise residential and commercial mortgage loans; commercial and industrial, asset-based, payroll finance, warehouse, factored receivables, equipment finance, public sector, and commercial real estate and multi-family loans; consumer loans, such as homeowner loans, home equity lines of credit, new and used automobile loans, and personal unsecured loans; and acquisition, development, and construction loans. In addition, the company engages in the third-party provider to sell mutual funds and annuities; and provision of annuity and wealth management products. As of December 31, 2017, it operated 128 full-service retail and commercial financial centers, which comprise 29 offices located in Nassau County, New York, 27 in Suffolk County, 19 in Queens County, 14 in Westchester County, 13 in Kings County, 9 in Rockland County, 6 in Orange County, 5 in New York City, and 2 in Bronx County, as well as 1 office each of Sullivan, Ulster, and Putnam Counties in New York; and 1 office in Bergen County, New Jersey. The company was founded in 1888 and is based in Montebello, New York.

American National Bankshares Company Profile

American National Bankshares Inc. operates as the bank holding company for American National Bank and Trust Company that provides financial products and services. The company operates through two segments, Community Banking, and Trust and Investment Services. It accepts deposit products, including checking, money market, savings, and consumer and commercial time deposits, as well as certificates of deposit. The company's loan products comprise commercial and residential real estate loans, commercial loans to small and medium-sized businesses, construction and land development loans, home equity loans, and consumer loans. It also offers trust and investment services, such as estate planning, trust account administration, investment management, and retail brokerage services; online and telephone banking services; insurance services; and investment management services, including purchasing equity, fixed income, and mutual fund investments for customer accounts, as well as operates 34 automated teller machines. As of February 21, 2018, it operated 26 banking offices and 2 loan production offices in Virginia and North Carolina. American National Bankshares Inc. was founded in 1909 and is headquartered in Danville, Virginia.

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