First Republic Bank (NYSE: FRC) and Patriot National Bancorp (NASDAQ:PNBK) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, earnings, profitability, institutional ownership and valuation.

Dividends

First Republic Bank pays an annual dividend of $0.68 per share and has a dividend yield of 0.7%. Patriot National Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. First Republic Bank pays out 16.0% 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. First Republic Bank has raised its dividend for 4 consecutive years. First Republic Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

First Republic Bank has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Patriot National Bancorp has a beta of 0.23, meaning that its stock price is 77% less volatile than the S&P 500.

Profitability

This table compares First Republic Bank and Patriot National Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Republic Bank 26.85% 12.06% 0.94%
Patriot National Bancorp 14.87% 6.89% 0.59%

Analyst Ratings

This is a summary of recent recommendations for First Republic Bank and Patriot National Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Republic Bank 0 8 6 0 2.43
Patriot National Bancorp 0 0 0 0 N/A

First Republic Bank currently has a consensus target price of $102.93, indicating a potential upside of 3.37%. Given First Republic Bank’s higher possible upside, equities research analysts clearly believe First Republic Bank is more favorable than Patriot National Bancorp.

Valuation and Earnings

This table compares First Republic Bank and Patriot National Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Republic Bank $2.46 billion 6.39 $668.88 million $4.24 23.48
Patriot National Bancorp $23.03 million 2.90 $4.36 million $1.13 15.28

First Republic Bank has higher revenue and earnings than Patriot National Bancorp. Patriot National Bancorp is trading at a lower price-to-earnings ratio than First Republic Bank, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

97.6% of First Republic Bank shares are owned by institutional investors. Comparatively, 2.3% of Patriot National Bancorp shares are owned by institutional investors. 78.6% of Patriot National Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

First Republic Bank beats Patriot National Bancorp on 14 of the 16 factors compared between the two stocks.

First Republic Bank Company Profile

First Republic Bank is a commercial bank and trust company. The Bank specializes in providing services, including private banking, private business banking, real estate lending and wealth management services, including trust and custody services, to clients in selected metropolitan areas in the United States. It operates through two segments: Commercial Banking and Wealth Management. The Commercial Banking segment is engaged in attracting funds from the public; originating loans, primarily real estate secured mortgage loans, and investing in investment securities. The Wealth Management segment consists of First Republic Investment Management, Inc.; its money market mutual fund activities through third-party providers and the brokerage activities of First Republic Securities Company, LLC; First Republic Trust Company and First Republic Trust Company of Delaware LLC (the Trust Company), and its foreign exchange activities. It offers a range of internally managed investment services.

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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