American National BankShares (NASDAQ: AMNB) and Lloyds Banking Group (NYSE:LYG) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, earnings, profitability, valuation, analyst recommendations and institutional ownership.
Institutional & Insider Ownership
33.3% of American National BankShares shares are owned by institutional investors. Comparatively, 2.1% of Lloyds Banking Group shares are owned by institutional investors. 6.4% of American National BankShares shares are owned by company insiders. Comparatively, 0.0% of Lloyds Banking Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This table compares American National BankShares and Lloyds Banking Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American National BankShares||$69.68 million||4.67||$16.30 million||$1.99||18.89|
|Lloyds Banking Group||$23.73 billion||2.87||$2.80 billion||$0.23||16.44|
Lloyds Banking Group has higher revenue and earnings than American National BankShares. Lloyds Banking Group 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.
This is a breakdown of recent ratings and target prices for American National BankShares and Lloyds Banking Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American National BankShares||0||3||0||0||2.00|
|Lloyds Banking Group||6||1||3||0||1.70|
American National BankShares currently has a consensus price target of $39.00, suggesting a potential upside of 3.72%. Given American National BankShares’ stronger consensus rating and higher probable upside, equities analysts plainly believe American National BankShares is more favorable than Lloyds Banking Group.
American National BankShares pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. Lloyds Banking Group pays an annual dividend of $0.14 per share and has a dividend yield of 3.7%. American National BankShares pays out 50.3% of its earnings in the form of a dividend. Lloyds Banking Group pays out 60.9% 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. Lloyds Banking Group has raised its dividend for 2 consecutive years. Lloyds Banking Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares American National BankShares and Lloyds Banking Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American National BankShares||23.04%||8.39%||0.99%|
|Lloyds Banking Group||19.22%||18.38%||1.10%|
Volatility and Risk
American National BankShares has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Lloyds Banking Group has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500.
American National BankShares beats Lloyds Banking Group on 9 of the 17 factors compared between the two stocks.
American National BankShares Company Profile
American National Bankshares Inc. is a one-bank holding company. American National Bank and Trust Company (the Bank) is the only banking subsidiary of the Company. The Company operates through two segments: community banking, and trust and investment services. The Community banking segment involves making loans to and generating deposits from individuals and businesses. All assets and liabilities of the Company are allocated to community banking. Investment income from securities is also allocated to the community banking segment. Loan fee income, service charges from deposit accounts and non-deposit fees, such as automated teller machine fees and insurance commissions generate additional income for community banking. Trust and investment services include estate planning, trust account administration, investment management and retail brokerage. The trust and investment services division receives fees for investment and administrative services.
Lloyds Banking Group Company Profile
Lloyds Banking Group plc is a provider of financial services to individual and business customers in the United Kingdom. The Company’s main business activities are retail and commercial banking, general insurance, and long-term savings, protection and investment. The Company’s segments are Retail, Commercial Banking, Consumer Finance, Insurance and Other. The Retail segment offers a range of financial service products, including current accounts, savings and mortgages. The Commercial Banking segment offers a range of products and services, such as lending, transactional banking, working capital management, risk management and debt capital markets services. The Consumer Finance segment offers consumer lending products, including motor finance, credit cards, and unsecured personal loans. The Insurance segment provides a range of protection, pension and investment products. Its brands include Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, Colleys, Lex Autolease and AMC.
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