Financial Contrast: Touchstone Bankshares (OTCMKTS:TSBA) and Lakeland Financial (NASDAQ:LKFN)

Touchstone Bankshares (OTCMKTS:TSBA) and Lakeland Financial (NASDAQ:LKFN) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.

Analyst Ratings

This is a summary of recent ratings and target prices for Touchstone Bankshares and Lakeland Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Touchstone Bankshares	0	0	0	0	0.00
Lakeland Financial	0	2	1	0	2.33

Lakeland Financial has a consensus price target of $71.00, suggesting a potential downside of 2.42%. Given Lakeland Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Lakeland Financial is more favorable than Touchstone Bankshares.

Insider & Institutional Ownership

0.4% of Touchstone Bankshares shares are held by institutional investors. Comparatively, 81.2% of Lakeland Financial shares are held by institutional investors. 10.4% of Touchstone Bankshares shares are held by insiders. Comparatively, 3.3% of Lakeland Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Touchstone Bankshares has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Lakeland Financial has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500.

Valuation and Earnings

This table compares Touchstone Bankshares and Lakeland Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Touchstone Bankshares	N/A	N/A	$1.61 million	$0.65	21.92
Lakeland Financial	$255.76 million	7.26	$93.77 million	$3.85	18.90

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

Profitability

This table compares Touchstone Bankshares and Lakeland Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Touchstone Bankshares	N/A	N/A	N/A
Lakeland Financial	22.85%	13.64%	1.37%

Dividends

Touchstone Bankshares pays an annual dividend of $0.32 per share and has a dividend yield of 2.2%. Lakeland Financial pays an annual dividend of $1.92 per share and has a dividend yield of 2.6%. Touchstone Bankshares pays out 49.2% of its earnings in the form of a dividend. Lakeland Financial pays out 49.9% 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 Financial has raised its dividend for 13 consecutive years. Lakeland Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Lakeland Financial beats Touchstone Bankshares on 13 of the 16 factors compared between the two stocks.

About Touchstone Bankshares

Touchstone Bankshares, Inc. operates as the bank holding company for Touchstone Bank that provides various community banking products and services in the United States. The company offers personal and business savings and checking accounts. It also provides home mortgage, professional mortgage, home equity, auto, and personal term loans; personal lines of credit; and business loans comprising commercial real estate, operating capital, business term, and construction loans, as well as business lines of credit. In addition, the company offers credit and debit cards; and digital banking, treasury, wealth management, and financial planning services. It has branches in northern North Carolina and south-central Virginia. The company was founded in 1906 and is headquartered in Prince George, Virginia.

About Lakeland Financial

Lakeland Financial Corporation operates as the bank holding company for Lake City Bank that provides various banking products and services in the United States. The company accepts various deposit products, such as noninterest bearing, interest-bearing checking, savings, money market, NOW, and demand deposits. Its loan products include commercial and industrial, commercial real estate and multi-family residential, construction, agri-business and agricultural, consumer 1-4 family mortgage, and other commercial and consumer loans. The company also provides retail and merchant credit card services; corporate treasury management, wealth advisory, and trust services; retail brokerage services, including various financial and investment products, such as annuities and life insurance; and mobile business banking and on-line treasury management services. It serves commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and health care industries. The company was founded in 1872 and is headquartered in Warsaw, Indiana.