South Plains Financial, Inc. (SPFI) stock analysis

P/E above its 5-year median

South Plains Financial's P/E of 11.4 is above its own 5-year median of 9.0.

P/E below the industry

South Plains Financial's P/E of 11.4 is below the Commercial Banks median of 12.1.

P/S below the industry

South Plains Financial's price-to-sales of 3.41 is below the Commercial Banks median of 3.60.

P/B above the industry

South Plains Financial's price-to-book of 1.30 is above the Commercial Banks median of 1.29.

Trading above fair value

The share price of $43.04 is above our fair value estimate of $41.09.

Margin of safety under 20%

The price is 4.7% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -0.4% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew 2.1% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 16.5% over the last twelve months, against a 5-year average of 5.2% a year.

Growing faster than the industry

Revenue grew 13.3% over the last twelve months; the Commercial Banks median is 11.3%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 12.6% over the last twelve months and averaged 14.2% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 1.4%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

South Plains Financial's return on equity of 12.6% is above the Commercial Banks median of 11.5%.

Earnings grew over 5 years

Net income grew 5.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 29.3% over the last twelve months, against a 5-year average of 27.1%.

Net margin below the industry

South Plains Financial's net margin of 29.3% is below the Commercial Banks median of 30.3%.

Well capitalized

Equity is 11.5% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Needs loans and deposits.

Adequate loan-loss reserve

The allowance for credit losses is not reported.

High cost base

Non-interest expense takes 61.6% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 20.1% over the past year.

Borrowings

Needs debt and equity figures.

Pays a dividend

South Plains Financial paid dividends worth 1.6% of the share price over the last twelve months.

Yield below Treasuries

The 1.6% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; South Plains Financial yields 1.6%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 8 fiscal years.

Covered by earnings

Dividends take 17.3% of net income.

Covered by free cash flow

Dividends take 14.4% of free cash flow.