Northrim BanCorp (NASDAQ: NRIM) and 1st Constitution Bancorp (NJ) (NASDAQ:FCCY) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Profitability

This table compares Northrim BanCorp and 1st Constitution Bancorp (NJ)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northrim BanCorp 14.15% 8.33% 1.03%
1st Constitution Bancorp (NJ) 17.32% 8.13% 0.83%

Analyst Recommendations

This is a summary of recent ratings and target prices for Northrim BanCorp and 1st Constitution Bancorp (NJ), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northrim BanCorp 0 0 0 0 N/A
1st Constitution Bancorp (NJ) 0 1 0 0 2.00

1st Constitution Bancorp (NJ) has a consensus target price of $18.00, suggesting a potential upside of 0.28%. Given 1st Constitution Bancorp (NJ)’s higher possible upside, analysts clearly believe 1st Constitution Bancorp (NJ) is more favorable than Northrim BanCorp.

Dividends

Northrim BanCorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. 1st Constitution Bancorp (NJ) pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. Northrim BanCorp pays out 43.8% of its earnings in the form of a dividend. 1st Constitution Bancorp (NJ) pays out 19.2% 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.

Insider and Institutional Ownership

71.2% of Northrim BanCorp shares are held by institutional investors. Comparatively, 27.0% of 1st Constitution Bancorp (NJ) shares are held by institutional investors. 2.9% of Northrim BanCorp shares are held by insiders. Comparatively, 20.0% of 1st Constitution Bancorp (NJ) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Northrim BanCorp and 1st Constitution Bancorp (NJ)’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Northrim BanCorp $95.00 million 2.60 $13.89 million $2.01 17.76
1st Constitution Bancorp (NJ) $43.99 million 3.29 $8.39 million $1.04 17.26

Northrim BanCorp has higher revenue and earnings than 1st Constitution Bancorp (NJ). 1st Constitution Bancorp (NJ) is trading at a lower price-to-earnings ratio than Northrim BanCorp, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Northrim BanCorp has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, 1st Constitution Bancorp (NJ) has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500.

Summary

Northrim BanCorp beats 1st Constitution Bancorp (NJ) on 8 of the 14 factors compared between the two stocks.

About Northrim BanCorp

Northrim BanCorp, Inc. is a bank holding company. The Company operates in two segments: Community Banking and Home Mortgage Lending. The Community Banking segment’s principal business focus is the offering of loan and deposit products to business and consumer customers in its primary market areas. The Community Banking segment operates approximately 10 branches throughout Alaska. The Home Mortgage Lending segment’s principal business focus is the origination and sale of mortgage loans for one- to four-family residential properties. Its loan products include short and medium-term commercial loans, commercial credit lines, construction and real estate loans, and consumer loans. Its commercial loan portfolio includes both secured and unsecured loans for working capital and expansion. It provides construction lending for commercial real estate projects. It offers personal loans for automobiles, recreational vehicles, boats, and other larger consumer purchases.

About 1st Constitution Bancorp (NJ)

1st Constitution Bancorp is the bank holding company for 1st Constitution Bank (the Bank). The Bank is a commercial bank, which is engaged in the business of commercial and retail banking. The Company operates through the Community Banking segment. The Community Banking segment consists of construction, commercial, retail and mortgage banking operations. As a community bank, the Bank offers a range of services (including demand, savings and time deposits and commercial and consumer/installment loans) to individuals, small businesses and not-for-profit organizations principally in the Fort Lee area of Bergen County and in Middlesex, Mercer, Somerset and Monmouth Counties of New Jersey. The Bank’s Mortgage Warehouse Funding Group offers revolving lines of credit that are available to licensed mortgage banking companies (the Warehouse Line of Credit). The Bank’s investment activities are classified as available for sale and held to maturity securities.

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