Contrasting Business First Bancshares (NASDAQ:BFST) & Texas Capital Bancshares (NASDAQ:TCBI)

Business First Bancshares (NASDAQ:BFST) and Texas Capital Bancshares (NASDAQ:TCBI) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Profitability

This table compares Business First Bancshares and Texas Capital Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Business First Bancshares 14.98% 8.71% 0.94%
Texas Capital Bancshares 6.16% 5.48% 0.40%

Earnings and Valuation

This table compares Business First Bancshares and Texas Capital Bancshares’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Business First Bancshares $114.18 million 4.10 $23.77 million $1.80 12.59
Texas Capital Bancshares $1.46 billion 2.67 $322.87 million $6.23 12.35

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

Risk and Volatility

Business First Bancshares has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Texas Capital Bancshares has a beta of 2.04, indicating that its share price is 104% more volatile than the S&P 500.

Insider & Institutional Ownership

28.3% of Business First Bancshares shares are held by institutional investors. Comparatively, 92.0% of Texas Capital Bancshares shares are held by institutional investors. 7.6% of Business First Bancshares shares are held by company insiders. Comparatively, 0.7% of Texas Capital Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Business First Bancshares and Texas Capital Bancshares, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Business First Bancshares 0 2 0 0 2.00
Texas Capital Bancshares 2 7 0 0 1.78

Business First Bancshares presently has a consensus price target of $15.00, suggesting a potential downside of 33.80%. Texas Capital Bancshares has a consensus price target of $38.00, suggesting a potential downside of 50.63%. Given Business First Bancshares’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Business First Bancshares is more favorable than Texas Capital Bancshares.

Summary

Business First Bancshares beats Texas Capital Bancshares on 7 of the 13 factors compared between the two stocks.

About Business First Bancshares

Business First Bancshares, Inc. operates as the bank holding company for b1BANK that provides various banking products and services. It offers various deposit products and services, including a range of checking, demand, money market, time, and savings accounts, as well as certificates of deposit; and remote deposit capture and direct deposit services. The company also provides commercial and industrial loans, including commercial lines of credit, working capital loans, term loans, equipment financing, asset acquisition, expansion and development loans, borrowing base loans, letters of credit, and other loan products; construction and development loans; commercial real estate loans; residential real estate loans comprising first and second lien one-to-four family mortgage loans, and home equity lines of credit; consumer loans, including secured and unsecured installment and term loans; and credit cards. In addition, it offers wealth management products, including mutual funds, annuities, individual retirement accounts, and other financial products. Further, the company provides a range of other financial services comprising drive-through banking facilities, automated teller machines, and employee and payroll benefits solutions; and night depository, personalized checks, treasury and cash management, merchant, automated clearing house, electronic funds transfer, domestic and foreign wire transfer, traveler's checks, vault, loan and deposit sweep accounts, lock-box, international trade finance, international trade, foreign exchange, online and mobile banking, e-statements, and bank-by-mail services. As of June 30, 2020, the company operated 48 banking centers located in the State of Louisiana and in Dallas, Texas. Business First Bancshares, Inc. was founded in 2006 and is headquartered in Baton Rouge, Louisiana.

About Texas Capital Bancshares

Texas Capital Bancshares, Inc. operates as the bank holding company for Texas Capital Bank, National Association that provides various banking products and services for commercial businesses, and professionals and entrepreneurs. It offers business deposit products and services, including commercial checking accounts, lockbox accounts, and cash concentration accounts, as well as other treasury management services, including information services, wire transfer initiation, ACH initiation, account transfer, and service integration; and consumer deposit products, such as checking accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides commercial loans for general corporate purposes comprising financing for working capital, internal growth, and acquisitions, as well as financing for business insurance premiums; real estate term and construction loans; mortgage warehouse lending; mortgage correspondent aggregation; equipment finance and leasing; treasury management services, including online banking and debit and credit card services; escrow services; and letters of credit. In addition, it offers personal wealth management and trust services; secured and unsecured loans; and online and mobile banking services. Further, the company provides American Airlines AAdvantage, an all-digital branch offering depositors. It operates in Austin, Dallas, Fort Worth, Houston, and San Antonio metropolitan areas of Texas. Texas Capital Bancshares, Inc. was founded in 1996 and is headquartered in Dallas, Texas.

Receive News & Ratings for Business First Bancshares Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Business First Bancshares and related companies with MarketBeat.com's FREE daily email newsletter.