Lakeland Financial (NASDAQ:LKFN) and S & T Bancorp (NASDAQ:STBA) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, risk and valuation.

Volatility & Risk

Lakeland Financial has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, S & T Bancorp has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Dividends

Lakeland Financial pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. S & T Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.9%. Lakeland Financial pays out 35.5% of its earnings in the form of a dividend. S & T Bancorp pays out 36.2% 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. Lakeland Financial has increased its dividend for 8 consecutive years and S & T Bancorp has increased its dividend for 7 consecutive years.

Valuation & Earnings

This table compares Lakeland Financial and S & T Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lakeland Financial $260.21 million 4.67 $87.05 million $3.38 14.05
S & T Bancorp $373.04 million 3.56 $98.23 million $3.09 12.52

S & T Bancorp has higher revenue and earnings than Lakeland Financial. S & T Bancorp is trading at a lower price-to-earnings ratio than Lakeland Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Lakeland Financial and S & T Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lakeland Financial 0 1 0 0 2.00
S & T Bancorp 0 1 0 0 2.00

Insider & Institutional Ownership

76.6% of Lakeland Financial shares are held by institutional investors. Comparatively, 62.0% of S & T Bancorp shares are held by institutional investors. 4.6% of Lakeland Financial shares are held by company insiders. Comparatively, 2.5% of S & T Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Lakeland Financial and S & T Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lakeland Financial 33.45% 15.42% 1.76%
S & T Bancorp 26.33% 10.43% 1.38%

Summary

Lakeland Financial beats S & T Bancorp on 11 of the 14 factors compared between the two stocks.

Lakeland Financial Company Profile

Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services. The company accepts various deposit products, such as noninterest bearing, interest-bearing checking, savings, money market, NOW, and demand deposits. Its loan products include commercial and industrial, commercial real estate and multi-family residential, agri-business and agricultural, consumer 1-4 family mortgage, and other consumer loans. The company also offers retail and merchant credit card services; corporate treasury management, wealth advisory, and trust services; retail brokerage services, including various financial and investment products, such as annuities and life insurance; and Internet business banking and online treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. As of January 25, 2019, the company operated 50 offices in Northern and Central Indiana. Lakeland Financial Corporation was founded in 1872 and is headquartered in Warsaw, Indiana.

S & T Bancorp Company Profile

S&T Bancorp, Inc. operates as the bank holding company for S&T Bank that provides retail and commercial banking products and services. The company accepts time and demand deposits; and offers commercial and consumer loans, cash management services, and brokerage and trust services, as well as acts as guardian and custodian of employee benefits. It also manages private investment accounts for individuals and institutions. In addition, the company distributes life insurance and long-term disability income insurance products, as well as offers title insurance agency services to commercial customers. As of December 31, 2018, it operated 58 branches located in 15 counties in Pennsylvania; 4 community banking branches and a leased branch in Ohio; and a loan production office in western New York. S&T Bancorp, Inc. was founded in 1902 and is headquartered in Indiana, Pennsylvania.

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