Head to Head Review: Sturgis Bancorp (OTCMKTS:STBI) and First Bancshares (NASDAQ:FBMS)

Sturgis Bancorp (OTCMKTS:STBI) and First Bancshares (NASDAQ:FBMS) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Dividends

Sturgis Bancorp pays an annual dividend of $0.68 per share and has a dividend yield of 3.7%. First Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Sturgis Bancorp pays out 283.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. First Bancshares pays out 45.2% of its earnings in the form of a dividend.

Insider and Institutional Ownership

70.0% of First Bancshares shares are held by institutional investors. 16.0% of Sturgis Bancorp shares are held by company insiders. Comparatively, 3.5% of First Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Sturgis Bancorp and First Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sturgis Bancorp	$49.68 million	0.79	$6.02 million	$0.24	75.63
First Bancshares	$387.64 million	3.12	$75.46 million	$2.21	17.55

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

Analyst Ratings

This is a summary of recent ratings and target prices for Sturgis Bancorp and First Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sturgis Bancorp	0	0	0	0	0.00
First Bancshares	0	2	1	0	2.33

First Bancshares has a consensus price target of $38.75, suggesting a potential downside of 0.07%. Given First Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe First Bancshares is more favorable than Sturgis Bancorp.

Profitability

This table compares Sturgis Bancorp and First Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sturgis Bancorp	0.94%	N/A	N/A
First Bancshares	17.25%	8.19%	1.00%

Risk & Volatility

Sturgis Bancorp has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500. Comparatively, First Bancshares has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500.

Summary

First Bancshares beats Sturgis Bancorp on 13 of the 16 factors compared between the two stocks.

About Sturgis Bancorp

Sturgis Bancorp, Inc. operates as the bank holding company for Sturgis Bank & Trust Company that provides banking products and services in Michigan, the United States. The company offers checking, savings and health savings, and money market accounts; and certificates of deposit and individual retirement accounts. It also provides mortgage, automobile, savings secured, personal, home equity, equipment and machinery, government supported, and commercial real estate loans, as well as home equity lines of credit and business lines of credit; and credit cards. In addition, the company offers private banking, cashier checks, wire transfers, foreign drafts and foreign currency, overdraft protection, night depository, and notary services, as well as safe deposit boxes and residential mortgages. Further, it provides direct deposit, remote deposit capture, Visa check card, and checks reorder services; and investment and financial-advisory services, as well as commercial and consumer insurance and title insurance products. Additionally, the company offers estate and asset management services, such as estate settlements, trust administration, record keeping, investment management, and custody services; cash and treasury management; and online and mobile banking, bill pay, and mobile wallet services. It operates through 14 bank facilities and 4 full service standalone ATMs located in 12 communities in Michigan. Sturgis Bancorp, Inc. was founded in 1905 and is headquartered in Sturgis, Michigan.

About First Bancshares

The First Bancshares, Inc. operates as the bank holding company for The First Bank that provides general commercial and retail banking services. The company operates through three segments: Commercial/Retail Bank, Mortgage Banking Division, and Holding Company. It offers deposit services, including checking, NOW, and savings accounts; other time deposits, such as daily money market accounts and longer-term certificates of deposit; and individual retirement and health savings accounts. The company also provides commercial loans comprising secured and unsecured loans for working capital, business expansion, and purchase of equipment and machinery; consumer loans consisting of equity lines of credit, as well as secured and unsecured loans for financing automobiles, home improvements, education, and personal investments; and real estate construction and acquisition loans. In addition, it originates loans to purchase existing residential homes, construct new homes, and to refinance existing mortgages; and provides financial and wealth management services. Further, the company offers online internet banking services, automated teller machines, voice response telephone inquiry services, commercial sweep accounts, cash management services, safe deposit boxes, merchant services, mobile deposit, direct deposit of payroll and social security checks, automatic drafts for various accounts, and credit card services. It serves small to medium-sized businesses, professional concerns, individuals, associations, organizations, and governmental authorities. The company operates full-service banking and financial service offices, motor bank facility, and loan production offices in Mississippi, Alabama, Florida, Georgia, and Louisiana. The First Bancshares, Inc. was incorporated in 1995 and is headquartered in Hattiesburg, Mississippi.