Veritex (NASDAQ:VBTX – Get Rating) and ChoiceOne Financial Services (NASDAQ:COFS – Get Rating) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.
Dividends
Veritex pays an annual dividend of $0.80 per share and has a dividend yield of 4.5%. ChoiceOne Financial Services pays an annual dividend of $1.04 per share and has a dividend yield of 4.2%. Veritex pays out 29.5% of its earnings in the form of a dividend. ChoiceOne Financial Services pays out 33.0% 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. ChoiceOne Financial Services has raised its dividend for 11 consecutive years. Veritex is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a summary of current recommendations for Veritex and ChoiceOne Financial Services, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Veritex | 0 | 2 | 1 | 0 | 2.33 |
| ChoiceOne Financial Services | 0 | 0 | 0 | 0 | N/A |
Volatility and Risk
Veritex has a beta of 1.43, suggesting that its stock price is 43% more volatile than the S&P 500. Comparatively, ChoiceOne Financial Services has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500.
Profitability
This table compares Veritex and ChoiceOne Financial Services’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Veritex | 29.13% | 10.31% | 1.30% |
| ChoiceOne Financial Services | 26.52% | 13.84% | 1.00% |
Earnings and Valuation
This table compares Veritex and ChoiceOne Financial Services’ top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Veritex | $422.62 million | 2.27 | $146.32 million | $2.71 | 6.52 |
| ChoiceOne Financial Services | $89.13 million | 2.11 | $23.64 million | $3.15 | 7.95 |
Veritex has higher revenue and earnings than ChoiceOne Financial Services. Veritex is trading at a lower price-to-earnings ratio than ChoiceOne Financial Services, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
85.9% of Veritex shares are owned by institutional investors. Comparatively, 11.3% of ChoiceOne Financial Services shares are owned by institutional investors. 3.4% of Veritex shares are owned by company insiders. Comparatively, 6.8% of ChoiceOne Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Veritex beats ChoiceOne Financial Services on 11 of the 16 factors compared between the two stocks.
About Veritex
Veritex Holdings, Inc. engages in the provision of commercial banking products and services to small to medium-sized businesses and professionals. It offers personal and business banking products, mortgages, and treasury services. The company was founded by Charles Malcolm Holland III in June 2009 and is headquartered in Dallas, TX.
About ChoiceOne Financial Services
ChoiceOne Financial Services, Inc. is a holding company, which engages in the provision of a variety of deposit, payment, credit, and other financial services to all types of customers, through its subsidiary, ChoiceOne Bank. The firm offers time, savings, and demand deposits, safe deposit services, and automated transaction machine services. It also provides commercial and consumer loans. The company was founded on February 24, 1986 and is headquartered in Sparta, MI.
Receive News & Ratings for Veritex Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Veritex and related companies with MarketBeat.com's FREE daily email newsletter.
