American National Bankshares (NASDAQ: AMNB) and Cape Bancorp (NASDAQ:CBNJ) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.
Volatility & Risk
American National Bankshares has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500. Comparatively, Cape Bancorp has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.
This is a summary of recent recommendations for American National Bankshares and Cape Bancorp, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American National Bankshares||0||3||0||0||2.00|
American National Bankshares presently has a consensus price target of $39.00, indicating a potential downside of 4.06%. Given American National Bankshares’ higher probable upside, equities research analysts plainly believe American National Bankshares is more favorable than Cape Bancorp.
This table compares American National Bankshares and Cape Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American National Bankshares||23.04%||8.39%||0.99%|
American National Bankshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.5%. Cape Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. American National Bankshares pays out 50.3% of its earnings in the form of a dividend. Cape Bancorp pays out 43.5% 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. Cape Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider & Institutional Ownership
33.3% of American National Bankshares shares are owned by institutional investors. 6.4% of American National Bankshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares American National Bankshares and Cape Bancorp’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|American National Bankshares||$69.68 million||5.05||$16.30 million||$1.99||20.43|
American National Bankshares has higher revenue and earnings than Cape Bancorp. Cape Bancorp is trading at a lower price-to-earnings ratio than American National Bankshares, indicating that it is currently the more affordable of the two stocks.
American National Bankshares beats Cape Bancorp on 9 of the 11 factors compared between the two stocks.
About American National Bankshares
American National Bankshares Inc. is a one-bank holding company. American National Bank and Trust Company (the Bank) is the only banking subsidiary of the Company. The Company operates through two segments: community banking, and trust and investment services. The Community banking segment involves making loans to and generating deposits from individuals and businesses. All assets and liabilities of the Company are allocated to community banking. Investment income from securities is also allocated to the community banking segment. Loan fee income, service charges from deposit accounts and non-deposit fees, such as automated teller machine fees and insurance commissions generate additional income for community banking. Trust and investment services include estate planning, trust account administration, investment management and retail brokerage. The trust and investment services division receives fees for investment and administrative services.
About Cape Bancorp
Cape Bancorp, Inc. (Cape Bancorp) is the holding company of Cape Bank (the Bank). The Bank focuses on providing deposit and loan products to retail customers and to small and mid-sized businesses from its fourteen full service branch offices, located in Atlantic and Cape May Counties, one drive-up teller/ATM operation in Atlantic County, three market development offices (MDOs) located in Burlington, Cape May and Atlantic Counties in New Jersey, and two MDOs in Pennsylvania servicing the five county Philadelphia market located in Radnor, Delaware County and in Philadelphia. It attracts deposits from the general public and uses those funds to originate a variety of loans, including commercial mortgages, commercial business loans, home equity loans and lines of credit (HELOC) and construction loans. Its retail and business banking deposit products include checking accounts, money market accounts, savings accounts, and certificates of deposit with terms ranging from 30 days to 60 months.
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