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

Analyst Recommendations

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This is a breakdown of current ratings and price targets for Lakeland Bancorp and Guaranty Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lakeland Bancorp 0 1 1 0 2.50
Guaranty Bancshares 0 2 0 0 2.00

Lakeland Bancorp currently has a consensus price target of $24.50, suggesting a potential upside of 20.69%. Guaranty Bancshares has a consensus price target of $33.50, suggesting a potential upside of 8.73%. Given Lakeland Bancorp’s stronger consensus rating and higher probable upside, equities analysts plainly believe Lakeland Bancorp is more favorable than Guaranty Bancshares.

Profitability

This table compares Lakeland Bancorp and Guaranty Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lakeland Bancorp 24.38% 9.37% 1.00%
Guaranty Bancshares 16.78% 9.24% 0.84%

Valuation & Earnings

This table compares Lakeland Bancorp and Guaranty Bancshares’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lakeland Bancorp $215.64 million 4.46 $52.58 million $1.10 18.45
Guaranty Bancshares $86.06 million 3.96 $14.44 million $1.41 21.85

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

Dividends

Lakeland Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.0%. Guaranty Bancshares pays an annual dividend of $0.56 per share and has a dividend yield of 1.8%. Lakeland Bancorp pays out 36.4% of its earnings in the form of a dividend. Guaranty Bancshares pays out 39.7% 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 Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

53.0% of Lakeland Bancorp shares are owned by institutional investors. Comparatively, 20.8% of Guaranty Bancshares shares are owned by institutional investors. 6.2% of Lakeland Bancorp shares are owned by insiders. Comparatively, 34.1% of Guaranty Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

Lakeland Bancorp has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Guaranty Bancshares has a beta of 0.02, indicating that its share price is 98% less volatile than the S&P 500.

Summary

Lakeland Bancorp beats Guaranty Bancshares on 13 of the 16 factors compared between the two stocks.

Lakeland Bancorp Company Profile

Lakeland Bancorp, Inc. is the bank holding company for Lakeland Bank (Lakeland). Lakeland operates under a state bank charter and provides full banking services. Lakeland generates commercial, mortgage and consumer loans and receives deposits from customers located in Northern and Central New Jersey. Lakeland also provides non-deposit products, such as securities brokerage services, including mutual funds and variable annuities. Through Lakeland, the Company offers a range of lending, depository and related financial services to individuals and small to medium sized businesses located in northern and central New Jersey. Lakeland’s equipment financing division provides a solution to small and medium sized companies preferring to lease equipment over other financial alternatives. Lakeland’s asset based loan department provides commercial borrowers with another lending alternative. It also offers wire transfer, Internet banking, mobile banking and night depository services.

Guaranty Bancshares Company Profile

Guaranty Bancshares, Inc. is the holding company for Guaranty Bank & Trust (Guaranty). Guaranty offers various solutions, such as personal banking, business banking, mortgage and wealth management. Its personal banking solutions include checking accounts, which include compare accounts, green checking, student checking, choice checking, guaranty interest checking, order checks and debit cards; savings accounts, which include regular savings, premier money market, certificate of deposit, individual retirement account (IRA) options and health savings account, and online banking, which includes money desktop and e-statements. Guaranty offers various loans, including line of credit, small business administration loans and real estate loans. Guaranty also offers mobile banking solutions, mortgage warehouse lending solutions and treasury management solutions. It has approximately 30 bank locations in over 20 Texas communities.

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