American River Bankshares (NASDAQ: AMRB) and Patriot National Bancorp (NASDAQ:PNBK) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Profitability

This table compares American River Bankshares and Patriot National Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American River Bankshares 27.46% 7.46% 0.95%
Patriot National Bancorp 14.87% 6.89% 0.59%

Dividends

American River Bankshares pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. Patriot National Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. American River Bankshares pays out 21.3% of its earnings in the form of a dividend. Patriot National Bancorp pays out 3.5% 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.

Institutional & Insider Ownership

51.0% of American River Bankshares shares are held by institutional investors. Comparatively, 2.3% of Patriot National Bancorp shares are held by institutional investors. 12.5% of American River Bankshares shares are held by company insiders. Comparatively, 78.6% of Patriot National 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.

Risk & Volatility

American River Bankshares has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500. Comparatively, Patriot National Bancorp has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500.

Valuation & Earnings

This table compares American River Bankshares and Patriot National Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American River Bankshares $23.00 million 3.59 $5.90 million $0.94 13.98
Patriot National Bancorp $23.03 million 2.82 $4.36 million $1.13 14.87

American River Bankshares has higher revenue, but lower earnings than Patriot National Bancorp. American River Bankshares is trading at a lower price-to-earnings ratio than Patriot National Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for American River Bankshares and Patriot National Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American River Bankshares 1 1 0 0 1.50
Patriot National Bancorp 0 0 0 0 N/A

American River Bankshares presently has a consensus price target of $12.50, indicating a potential downside of 4.87%. Given American River Bankshares’ higher possible upside, equities analysts plainly believe American River Bankshares is more favorable than Patriot National Bancorp.

Summary

American River Bankshares beats Patriot National Bancorp on 9 of the 14 factors compared between the two stocks.

American River Bankshares Company Profile

American River Bankshares is a bank holding company. The Company’s banking subsidiary is American River Bank (the Bank). The Bank’s primary business is serving the commercial banking needs of small to mid-sized businesses. The Bank accepts checking and savings deposits; offers money market deposit accounts and certificates of deposit; makes secured and unsecured commercial loans, secured real estate loans, and other installment and term loans, and offers other customary banking services. The Bank also conducts lease financing for various types of business equipment, from computer software to heavy earth-moving equipment. It serves various communities located in Sacramento, Placer, Yolo, El Dorado, Sonoma and Amador counties. It also serves Alameda, Contra Costa and Santa Clara Counties through loan production offices located in the Cities of San Jose and San Ramon. Its loans include real estate construction loans; lease financing receivable; agriculture loans, and consumer loans.

Patriot National Bancorp Company Profile

Patriot National Bancorp, Inc. is a one-bank holding company for Patriot Bank, N.A. (the Bank), a national banking association. The Bank offers consumer and commercial deposit accounts, such as checking, interest-bearing negotiable order of withdrawal (NOW) account, money market, time certificates of deposit, savings, Certificate of Deposit Account Registry Service (CDARS), individual retirement accounts (IRAs) and health savings accounts (HSAs). The Bank’s other services include automated clearing house (ACH) transfers, lockbox, Internet banking, bill paying, remote deposit capture, debit cards, money orders, traveler’s checks and automated teller machines (ATMs). The Bank offers commercial real estate loans, commercial business loans and various consumer loans to individuals, small and medium-sized businesses, and professionals. Its commercial and industrial loan portfolio consists of commercial business loans and lines of credit to businesses and professionals.

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