Spirit of Texas Bancshares (STXB) versus Chemical Financial (CHFC) Financial Analysis

Spirit of Texas Bancshares (NASDAQ:STXB) and Chemical Financial (NASDAQ:CHFC) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, institutional ownership, earnings and valuation.

Insider and Institutional Ownership

32.8% of Spirit of Texas Bancshares shares are held by institutional investors. Comparatively, 84.0% of Chemical Financial shares are held by institutional investors. 14.0% of Spirit of Texas Bancshares shares are held by insiders. Comparatively, 1.0% of Chemical Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Spirit of Texas Bancshares and Chemical Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Spirit of Texas Bancshares 0 0 3 0 3.00
Chemical Financial 0 1 5 0 2.83

Spirit of Texas Bancshares presently has a consensus price target of $23.77, indicating a potential upside of 11.48%. Chemical Financial has a consensus price target of $54.00, indicating a potential upside of 21.68%. Given Chemical Financial’s higher possible upside, analysts clearly believe Chemical Financial is more favorable than Spirit of Texas Bancshares.

Profitability

This table compares Spirit of Texas Bancshares and Chemical Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Spirit of Texas Bancshares 14.71% 7.99% 1.02%
Chemical Financial 30.57% 10.20% 1.37%

Earnings & Valuation

This table compares Spirit of Texas Bancshares and Chemical Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Spirit of Texas Bancshares $67.83 million 3.83 $9.98 million $1.05 20.30
Chemical Financial $924.53 million 3.43 $284.02 million $3.94 11.26

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

Dividends

Chemical Financial pays an annual dividend of $1.36 per share and has a dividend yield of 3.1%. Spirit of Texas Bancshares does not pay a dividend. Chemical Financial pays out 34.5% of its earnings in the form of a dividend. Chemical Financial has increased its dividend for 7 consecutive years.

Summary

Chemical Financial beats Spirit of Texas Bancshares on 11 of the 16 factors compared between the two stocks.

Spirit of Texas Bancshares Company Profile

Spirit of Texas Bancshares, Inc. operates as the holding company for Spirit of Texas Bank SSB that provides various commercial and retail banking services to small and medium-sized businesses and individuals. It offers checking accounts, money market accounts, savings accounts, certificates of deposit, and IRA accounts. The company also provides commercial and industrial loans; 1-4 single family residential real estate loans; construction, land, and development loans; commercial real estate loans, such as owner-occupied commercial real estate loans, other commercial real estate loans, and multifamily loans and farmland; consumer loans and leases; and municipal and other loans. In addition, it offers debit and credit cards, safe deposit boxes, wire transfer and treasury management services, and online banking services; and invests in U.S. Treasury bills and notes, as well as in securities of federally sponsored agencies, such as Federal Home Loan Bank bonds. The company operates through a network of 23 full-service branches located in the Houston, Dallas/Fort Worth, and Bryan/College Station metropolitan areas, as well as North Central Texas. Spirit of Texas Bancshares, Inc. was founded in 2008 and is headquartered in Conroe, Texas.

Chemical Financial Company Profile

Chemical Financial Corporation operates as a financial holding company of Chemical Bank that offers a range of banking and fiduciary products and services to residents and business customers. It offers business and personal checking accounts, savings and individual retirement accounts, time deposit instruments, electronically accessed banking products, residential and commercial real estate financing, commercial lending, consumer financing, debit cards, safe deposit box, money transfer, automated teller machines, insurance and investment products, corporate and personal wealth management, and mortgage banking and other banking services. The company also offers mutual funds and annuities; trust, investment management, and custodial services; financial and estate planning; and retirement and employee benefit programs. As of December 31, 2018, it operated through 212 banking offices located in Michigan, northeast Ohio, and northern Indiana. The company has 8 loan production offices and approximately 237 automated teller machines. Chemical Financial Corporation was founded in 1917 and is headquartered in Detroit, Michigan.

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