Head-To-Head Analysis: Dime Community Bancshares (DCOM) vs. Southern First Bancshares (SFST)

Dime Community Bancshares (NASDAQ: DCOM) and Southern First Bancshares (NASDAQ:SFST) are both small-cap financials companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Dividends

Dime Community Bancshares pays an annual dividend of $0.56 per share and has a dividend yield of 2.6%. Southern First Bancshares does not pay a dividend. Dime Community Bancshares pays out 56.6% of its earnings in the form of a dividend.

Volatility and Risk

Dime Community Bancshares has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Southern First Bancshares has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Dime Community Bancshares and Southern First Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dime Community Bancshares 1 2 0 0 1.67
Southern First Bancshares 0 1 2 0 2.67

Dime Community Bancshares currently has a consensus target price of $22.50, indicating a potential upside of 5.39%. Southern First Bancshares has a consensus target price of $38.67, indicating a potential downside of 8.16%. Given Dime Community Bancshares’ higher possible upside, analysts clearly believe Dime Community Bancshares is more favorable than Southern First Bancshares.

Valuation and Earnings

This table compares Dime Community Bancshares and Southern First Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dime Community Bancshares $271.56 million 2.94 $72.51 million $0.99 21.57
Southern First Bancshares $62.04 million 4.97 $13.03 million $1.99 21.16

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

Profitability

This table compares Dime Community Bancshares and Southern First Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dime Community Bancshares 16.99% 8.28% 0.77%
Southern First Bancshares 21.10% 11.10% 0.97%

Institutional and Insider Ownership

68.3% of Dime Community Bancshares shares are owned by institutional investors. Comparatively, 70.1% of Southern First Bancshares shares are owned by institutional investors. 7.3% of Dime Community Bancshares shares are owned by insiders. Comparatively, 12.9% of Southern First Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Southern First Bancshares beats Dime Community Bancshares on 10 of the 16 factors compared between the two stocks.

Dime Community Bancshares Company Profile

Dime Community Bancshares, Inc. operates as a holding company for Dime Community Bank (the Bank), a chartered savings bank. The Company is a unitary savings and loan holding company. The Company operates through Community Banking segment. The Bank’s principal business is gathering retail deposits, and lending them primarily in multifamily residential, commercial real estate and mixed use loans, as well as investing in mortgage-backed securities (MBS), obligations of the United States Government and Government Sponsored Entities (GSEs), and corporate debt and equity securities. The Bank’s primary sources of funds are, in general, deposits; loan amortization, prepayments and maturities; MBS amortization, prepayments and maturities; investment securities maturities and sales, and advances from the Federal Home Loan Bank of New York (FHLBNY).

Southern First Bancshares Company Profile

Southern First Bancshares, Inc. is a bank holding company that owns the capital stock of Southern First Bank (the Bank), a South Carolina state bank, and all of the stock of Greenville First Statutory Trust I and II (the Trusts). The Bank is a commercial bank with approximately nine retail offices located in Greenville, Columbia and Charleston, South Carolina. The Bank is primarily engaged in the business of accepting demand deposits and savings deposits insured by the Federal Deposit Insurance Corporation (the FDIC) and providing commercial, consumer and mortgage loans to the public. In addition to deposit and loan services, the Company offers other bank services, such as Internet banking, cash management services, safe deposit boxes, direct deposit and automatic drafts for various accounts. The Bank offers a range of lending services, including real estate, commercial, and equity-line consumer loans to individuals and small- to medium-sized businesses, and professional firms.

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