Prosperity Bancshares (NYSE:PB) and Southern National Banc. of Virginia (NASDAQ:SONA) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.
Earnings and Valuation
This table compares Prosperity Bancshares and Southern National Banc. of Virginia’s gross revenue, earnings per share and valuation.
Prosperity Bancshares has higher revenue and earnings than Southern National Banc. of Virginia. Prosperity Bancshares is trading at a lower price-to-earnings ratio than Southern National Banc. of Virginia, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and target prices for Prosperity Bancshares and Southern National Banc. of Virginia, as provided by MarketBeat.com.
Prosperity Bancshares presently has a consensus target price of $74.56, suggesting a potential upside of 4.98%. Given Prosperity Bancshares’ higher probable upside, analysts plainly believe Prosperity Bancshares is more favorable than Southern National Banc. of Virginia.
Prosperity Bancshares pays an annual dividend of $1.44 per share and has a dividend yield of 2.0%. Southern National Banc. of Virginia pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. Prosperity Bancshares pays out 36.5% of its earnings in the form of a dividend. Southern National Banc. of Virginia pays out 36.4% 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. Prosperity Bancshares has raised its dividend for 14 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Prosperity Bancshares and Southern National Banc. of Virginia’s net margins, return on equity and return on assets.
Volatility & Risk
Prosperity Bancshares has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Southern National Banc. of Virginia has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.
Insider and Institutional Ownership
77.5% of Prosperity Bancshares shares are held by institutional investors. Comparatively, 71.8% of Southern National Banc. of Virginia shares are held by institutional investors. 5.1% of Prosperity Bancshares shares are held by insiders. Comparatively, 6.0% of Southern National Banc. of Virginia shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Prosperity Bancshares beats Southern National Banc. of Virginia on 12 of the 16 factors compared between the two stocks.
About Prosperity Bancshares
Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides retail and commercial banking services to small and medium-sized businesses, and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts. The company also offers 1-4 family residential mortgage, commercial mortgage and multifamily residential, commercial and industrial, agricultural real estate, 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; and consumer durables and home equity loans. In addition, it provides Internet banking and other cash management, mobile banking, trust and wealth management, retail brokerage, mortgage banking, and automated telephone banking services, as well as debit and credit cards. As of December 31, 2017, the company operated 242 full service banking locations comprising 65 in the Houston area, including The Woodlands; 29 in the South Texas area consisting of Corpus Christi and Victoria; 33 in the Dallas/Fort Worth area; 22 in the East Texas area; 29 in the Central Texas area comprising Austin and San Antonio; 34 in the West Texas area, including Lubbock, Midland-Odessa and Abilene; 16 in the Bryan/College Station area; 6 in the Central Oklahoma area; and 8 in the Tulsa, Oklahoma area. Prosperity Bancshares, Inc. was founded in 1983 and is based in Houston, Texas.
About Southern National Banc. of Virginia
Southern National Bancorp of Virginia, Inc. operates as the bank holding company for Sonabank that provides commercial banking services to middle market corporate clients and retail clients in the United States. Its deposit products include noninterest-bearing and interest-bearing checking, commercial checking, money market, and savings accounts, as well as certificates of deposit. The company's loan portfolio comprises commercial mortgage and non-mortgage loans, including commercial real estate loans, construction to permanent loans, development and builder loans, accounts receivable financing, lines of credit, equipment and vehicle loans, leasing, and commercial overdraft protection; construction loans for commercial, multifamily, and other non-residential properties; commercial business loans, such as lines of credit, revolving credit facilities, demand loans, term loans, equipment loans, small business administration loans, stand-by letters of credit, and unsecured loans; residential mortgage lending; and secured and unsecured consumer loans. It also offers cash management services comprising investment/sweep, zero balance, and controlled disbursement accounts; and wire transfer, employer/payroll processing, night depository, lockbox, depository transfer, merchant, ACH origination, check 21 processing, asset based lending, and mobile banking application services. In addition, the company provides other consumer/retail products and services that include debit and credit cards, ATM services, travelers' checks, notary services, and online banking services. At December 31, 2017, it had 38 full-service retail branches in Virginia; and 7 full-service retail branches in Maryland. The company was founded in 2004 and is headquartered in McLean, Virginia.