Contrasting Carolina Financial (CARO) & Great Southern Bancorp (GSBC)

Carolina Financial (NASDAQ:CARO) and Great Southern Bancorp (NASDAQ:GSBC) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Dividends

Carolina Financial pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. Great Southern Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 2.3%. Carolina Financial pays out 13.7% of its earnings in the form of a dividend. Great Southern Bancorp pays out 34.8% 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. Carolina Financial has raised its dividend for 3 consecutive years and Great Southern Bancorp has raised its dividend for 4 consecutive years. Great Southern Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Carolina Financial has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, Great Southern Bancorp has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Carolina Financial and Great Southern Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carolina Financial 0 2 3 0 2.60
Great Southern Bancorp 0 2 0 0 2.00

Carolina Financial currently has a consensus target price of $38.80, indicating a potential upside of 5.09%. Great Southern Bancorp has a consensus target price of $57.00, indicating a potential upside of 3.77%. Given Carolina Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe Carolina Financial is more favorable than Great Southern Bancorp.

Insider and Institutional Ownership

54.0% of Carolina Financial shares are held by institutional investors. Comparatively, 41.4% of Great Southern Bancorp shares are held by institutional investors. 7.8% of Carolina Financial shares are held by company insiders. Comparatively, 23.0% of Great Southern Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Carolina Financial and Great Southern Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Carolina Financial $129.00 million 6.47 $28.56 million $2.04 18.10
Great Southern Bancorp $221.59 million 3.51 $51.56 million $3.68 14.93

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

Profitability

This table compares Carolina Financial and Great Southern Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carolina Financial 19.50% 11.11% 1.53%
Great Southern Bancorp 23.35% 10.84% 1.15%

Summary

Carolina Financial beats Great Southern Bancorp on 9 of the 17 factors compared between the two stocks.

Carolina Financial Company Profile

Carolina Financial Corporation operates as a holding company for CresCom Bank that provides a range of commercial and retail banking financial services in South Carolina and North Carolina. The company operates through three segments: Community Banking, Wholesale Mortgage Banking, and Other. It offers checking accounts, commercial accounts, savings accounts, money market accounts, retirement accounts, longer-term certificates of deposit, noninterest-bearing demand accounts, and interest-bearing demand accounts to individuals, businesses, associations, organizations, and governmental authorities. The company also provides commercial and residential real estate mortgage loans, real estate construction loans, commercial and industrial loans, commercial leases, and consumer loans to individuals, small to medium-sized businesses, and professional firms. In addition, it offers mortgage banking services comprising correspondent lending and loan servicing. The company operates through a network of 62 full service branches and 2 loan production offices located in South and North Carolina. Carolina Financial Corporation was incorporated in 1996 and is based in Charleston, South Carolina.

Great Southern Bancorp Company Profile

Great Southern Bancorp, Inc. operates as a bank holding company for Great Southern Bank that offers a range of financial services in the United States. Its deposit products include regular savings accounts, checking accounts, money market accounts, fixed interest rate certificates with varying maturities, certificates of deposits, brokered certificates, and individual retirement accounts. The company's loan portfolio comprises residential and commercial real estate loans, construction loans, and commercial business loans, as well as secured consumer loans, including automobile loans, boat loans, home equity loans, loans secured by savings deposits, home improvement loans, and unsecured consumer loans. As of December 31, 2017, it operated 104 retail banking centers and approximately 200 automated teller machines in Missouri, Iowa, Minnesota, Nebraska, Kansas, and Arkansas. Great Southern Bancorp, Inc. was founded in 1923 and is headquartered in Springfield, Missouri.

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