Stock Yards Bancorp (NASDAQ:SYBT) and Prosperity Bancshares (NYSE:PB) Financial Contrast

Stock Yards Bancorp (NASDAQ:SYBT) and Prosperity Bancshares (NYSE:PB) are both mid-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, institutional ownership, dividends and earnings.

Earnings and Valuation

This table compares Stock Yards Bancorp and Prosperity Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stock Yards Bancorp	$355.24 million	6.11	$114.54 million	$4.14	17.79
Prosperity Bancshares	$1.17 billion	5.66	$479.39 million	$5.25	13.29

Prosperity Bancshares has higher revenue and earnings than Stock Yards Bancorp. Prosperity Bancshares 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.

Volatility & Risk

Stock Yards Bancorp has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, Prosperity Bancshares has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Dividends

Stock Yards Bancorp pays an annual dividend of $1.24 per share and has a dividend yield of 1.7%. Prosperity Bancshares pays an annual dividend of $2.32 per share and has a dividend yield of 3.3%. Stock Yards Bancorp pays out 30.0% of its earnings in the form of a dividend. Prosperity Bancshares pays out 44.2% 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 and Prosperity Bancshares has increased its dividend for 27 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

56.5% of Stock Yards Bancorp shares are owned by institutional investors. Comparatively, 80.7% of Prosperity Bancshares shares are owned by institutional investors. 3.4% of Stock Yards Bancorp shares are owned by company insiders. Comparatively, 4.2% of Prosperity Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Stock Yards Bancorp and Prosperity Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stock Yards Bancorp	0	4	0	0	2.00
Prosperity Bancshares	0	6	10	0	2.63

Stock Yards Bancorp presently has a consensus target price of $77.25, indicating a potential upside of 4.87%. Prosperity Bancshares has a consensus target price of $83.80, indicating a potential upside of 20.14%. Given Prosperity Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe Prosperity Bancshares is more favorable than Stock Yards Bancorp.

Profitability

This table compares Stock Yards Bancorp and Prosperity Bancshares’ 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%
Prosperity Bancshares	26.79%	6.64%	1.22%

Summary

Prosperity Bancshares beats Stock Yards Bancorp 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 Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.