Guaranty Bancshares (NASDAQ:GNTY) and Nicolet Bankshares (NASDAQ:NCBS) Critical Analysis

Guaranty Bancshares (NASDAQ:GNTY) and Nicolet Bankshares (NASDAQ:NCBS) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Dividends

Guaranty Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 2.2%. Nicolet Bankshares does not pay a dividend. Guaranty Bancshares pays out 36.8% of its earnings in the form of a dividend.

Profitability

This table compares Guaranty Bancshares and Nicolet Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Guaranty Bancshares 20.05% 9.46% 1.02%
Nicolet Bankshares 28.06% 11.45% 1.48%

Earnings and Valuation

This table compares Guaranty Bancshares and Nicolet Bankshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Guaranty Bancshares $103.76 million 3.37 $20.60 million $1.85 16.35
Nicolet Bankshares $165.05 million 3.60 $41.04 million $4.12 15.41

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

Volatility and Risk

Guaranty Bancshares has a beta of 0.03, suggesting that its share price is 97% less volatile than the S&P 500. Comparatively, Nicolet Bankshares has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Guaranty Bancshares and Nicolet Bankshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guaranty Bancshares 0 1 1 0 2.50
Nicolet Bankshares 0 0 1 0 3.00

Guaranty Bancshares currently has a consensus target price of $32.50, indicating a potential upside of 7.47%. Nicolet Bankshares has a consensus target price of $71.00, indicating a potential upside of 11.81%. Given Nicolet Bankshares’ stronger consensus rating and higher probable upside, analysts plainly believe Nicolet Bankshares is more favorable than Guaranty Bancshares.

Insider and Institutional Ownership

23.0% of Guaranty Bancshares shares are held by institutional investors. Comparatively, 36.3% of Nicolet Bankshares shares are held by institutional investors. 22.6% of Guaranty Bancshares shares are held by insiders. Comparatively, 17.4% of Nicolet Bankshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Nicolet Bankshares beats Guaranty Bancshares on 12 of the 15 factors compared between the two stocks.

About Guaranty Bancshares

Guaranty Bancshares, Inc. operates as the bank holding company for Guaranty Bank & Trust, N.A. that provides a range of commercial and consumer banking products and services for small- and medium-sized businesses, professionals, and individuals. It offers various deposit products, such as checking and savings, money market, and business accounts, as well as certificates of deposit; and loan products comprising commercial and industrial, construction and development, 1-4 family residential, commercial real estate, farmland and agricultural, multi-family residential, and consumer loans. The company also provides trust, wealth management, and retirement plan services; online, mobile, and telephone banking, as well as automated teller machine services; debit cards; night depository and direct deposit services; cashier's checks and letters of credit; and treasury management services, including wire transfer, positive pay, remote deposit capture, and automated clearinghouse services. As of December 31, 2018, it operated 30 full service banking locations in East Texas, Central Texas, the Dallas/Fort Worth metropolitan statistical area (MSA), and the Houston MSA. The company was founded in 1913 and is headquartered in Addison, Texas.

About Nicolet Bankshares

Nicolet Bankshares, Inc. operates as the holding company for Nicolet National Bank that provides commercial and retail banking services for businesses and individuals. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; owner-occupied commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien mortgages, junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary services, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, remote deposit capture, and telephone banking services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, and official bank checks. Additionally, the company provides investment strategy and transactional services to financial institutions. As of December 31, 2018, it operated 38 branches located in northeast and central Wisconsin, as well as in Menominee, Michigan. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. Nicolet Bankshares, Inc. was founded in 2000 and is headquartered in Green Bay, Wisconsin.

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