Critical Contrast: First Western Financial (NASDAQ:MYFW) & Southside Bancshares (NASDAQ:SBSI)

First Western Financial (NASDAQ:MYFW) and Southside Bancshares (NASDAQ:SBSI) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Risk and Volatility

First Western Financial has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Southside Bancshares has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Profitability

This table compares First Western Financial and Southside Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Western Financial	3.33%	2.44%	0.20%
Southside Bancshares	18.94%	10.64%	1.01%

Earnings and Valuation

This table compares First Western Financial and Southside Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Western Financial	$88.93 million	1.91	$5.22 million	$0.62	28.29
Southside Bancshares	$248.79 million	3.68	$86.69 million	$2.77	10.90

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for First Western Financial and Southside Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Western Financial	0	1	2	0	2.67
Southside Bancshares	0	1	0	0	2.00

First Western Financial presently has a consensus target price of $23.83, indicating a potential upside of 35.88%. Southside Bancshares has a consensus target price of $37.00, indicating a potential upside of 22.56%. Given First Western Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe First Western Financial is more favorable than Southside Bancshares.

Insider and Institutional Ownership

60.3% of First Western Financial shares are owned by institutional investors. Comparatively, 55.7% of Southside Bancshares shares are owned by institutional investors. 17.9% of First Western Financial shares are owned by company insiders. Comparatively, 5.9% of Southside Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

About First Western Financial

First Western Financial, Inc., a financial holding company, provides wealth advisory, private baking, personal trust, investment management, mortgage lending, and institutional asset management services. The company operates through two segments: Wealth Management and Mortgage. The Wealth Management segment provides deposit, loan, life insurance, and trust and investment management advisory products and services. The Mortgage segment engages in soliciting, originating, and selling mortgage loans into the secondary market. It serves entrepreneurs, professionals, high net worth individuals or families, and business and philanthropic organizations. First Western Financial, Inc. was incorporated in 2002 and is headquartered in Denver, Colorado.

About Southside Bancshares

Southside Bancshares, Inc. operates as the bank holding company for Southside Bank that provides a range of financial services to individuals, businesses, municipal entities, and nonprofit organizations. Its deposit products include savings, money market, and interest and noninterest bearing checking accounts, as well as certificates of deposits. The company’s loan portfolio comprises consumer loans that include 1-4 family residential loans, home equity loans, home improvement loans, automobile loans, and other consumer related loans; commercial loans, such as short-term working capital loans for inventory and accounts receivable, short and medium-term loans for equipment or other business capital expansion, commercial real estate loans, and municipal loans; and construction loans for 1-4 family residential and commercial real estate. It also offers wealth management and trust services consisting of investment management, administration of irrevocable, revocable, and testamentary trusts, estate administration, and custodian services for individuals, partnerships, and corporations; safe deposit services; and brokerage services. In addition, the company provides retirement and employee benefit accounts, including plans and profit sharing plans; and telephone, internet, and mobile banking services. The company offers various banking services through branches, drive-thru facilities, automated teller machines, and interactive teller machines. Southside Bancshares, Inc. was founded in 1960 and is headquartered in Tyler, Texas.