Reviewing Eagle Bancorp (NASDAQ:EGBN) and ServisFirst Bancshares (NYSE:SFBS)

ServisFirst Bancshares (NYSE:SFBS) and Eagle Bancorp (NASDAQ:EGBN) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and recommmendations for ServisFirst Bancshares and Eagle Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServisFirst Bancshares	0	2	0	0	2.00
Eagle Bancorp	0	2	0	0	2.00

ServisFirst Bancshares currently has a consensus target price of $85.00, suggesting a potential upside of 1.69%. Eagle Bancorp has a consensus target price of $29.50, suggesting a potential upside of 16.83%. Given Eagle Bancorp’s higher possible upside, analysts clearly believe Eagle Bancorp is more favorable than ServisFirst Bancshares.

Earnings and Valuation

This table compares ServisFirst Bancshares and Eagle Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServisFirst Bancshares	$443.96 million	10.27	$206.85 million	$3.74	22.35
Eagle Bancorp	$309.65 million	2.46	$100.53 million	($1.40)	-18.04

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

Dividends

ServisFirst Bancshares pays an annual dividend of $1.34 per share and has a dividend yield of 1.6%. Eagle Bancorp pays an annual dividend of $0.66 per share and has a dividend yield of 2.6%. ServisFirst Bancshares pays out 35.8% of its earnings in the form of a dividend. Eagle Bancorp pays out -47.1% 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. Eagle Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

67.3% of ServisFirst Bancshares shares are owned by institutional investors. Comparatively, 78.0% of Eagle Bancorp shares are owned by institutional investors. 7.4% of ServisFirst Bancshares shares are owned by company insiders. Comparatively, 3.1% of Eagle Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

ServisFirst Bancshares has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Eagle Bancorp has a beta of 1.09, suggesting that its share price is 9% more volatile than the S&P 500.

Profitability

This table compares ServisFirst Bancshares and Eagle Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ServisFirst Bancshares	21.16%	14.23%	1.33%
Eagle Bancorp	-5.97%	5.04%	0.54%

Summary

ServisFirst Bancshares beats Eagle Bancorp on 9 of the 14 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

About Eagle Bancorp

Eagle Bancorp, Inc. operates as the bank holding company for EagleBank that provides commercial and consumer banking services primarily in the United States. The company also offers various commercial and consumer lending products comprising commercial loans for working capital, equipment purchases, real estate lines of credit, and government contract financing; asset based lending and accounts receivable financing; construction and commercial real estate loans; business equipment financing; consumer home equity lines of credit, personal lines of credit, and term loans; consumer installment loans, such as auto and personal loans; personal credit cards; and residential mortgage loans. In addition, it provides online and mobile banking services; checking and saving accounts; and other deposit services, including cash management services, business sweep accounts, lock boxes, remote deposit captures, account reconciliation services, merchant card services, safety deposit boxes, and automated clearing house origination, as well as after-hours depositories and ATM services. Further, the company offers insurance products and services through a referral program; and treasury management services. The company serves sole proprietors, small and medium-sized businesses, partnerships, corporations, and non-profit organizations and associations, as well as investors. Eagle Bancorp, Inc. was incorporated in 1997 and is headquartered in Bethesda, Maryland.