Southern National Banc. of Virginia (NASDAQ: SONA) and Pacific Continental (NASDAQ:PCBK) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, risk, earnings, analyst recommendations and valuation.

Valuation & Earnings

This table compares Southern National Banc. of Virginia and Pacific Continental’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southern National Banc. of Virginia $51.81 million 7.75 $10.31 million $0.31 54.13
Pacific Continental $97.76 6,521,685.76 $19.77 $1.13 24.78

Southern National Banc. of Virginia has higher revenue and earnings than Pacific Continental. Pacific Continental is trading at a lower price-to-earnings ratio than Southern National Banc. of Virginia, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Southern National Banc. of Virginia and Pacific Continental’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southern National Banc. of Virginia 8.11% 5.63% 0.67%
Pacific Continental 26.45% 10.15% 1.10%

Dividends

Southern National Banc. of Virginia pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. Pacific Continental pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. Southern National Banc. of Virginia pays out 103.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pacific Continental pays out 38.9% of its earnings in the form of a dividend.

Institutional and Insider Ownership

68.5% of Southern National Banc. of Virginia shares are owned by institutional investors. Comparatively, 67.5% of Pacific Continental shares are owned by institutional investors. 9.6% of Southern National Banc. of Virginia shares are owned by company insiders. Comparatively, 4.8% of Pacific Continental shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Southern National Banc. of Virginia has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500. Comparatively, Pacific Continental has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Southern National Banc. of Virginia and Pacific Continental, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southern National Banc. of Virginia 0 0 0 0 N/A
Pacific Continental 0 3 1 0 2.25

Pacific Continental has a consensus price target of $28.00, indicating a potential upside of 0.00%. Given Pacific Continental’s higher probable upside, analysts clearly believe Pacific Continental is more favorable than Southern National Banc. of Virginia.

Summary

Pacific Continental beats Southern National Banc. of Virginia on 10 of the 15 factors compared between the two stocks.

Southern National Banc. of Virginia Company Profile

Southern National Bancorp of Virginia, Inc. (Southern National) is the bank holding company for Sonabank (Sonabank). The Company’s principal business is the acquisition of deposits from the general public through its branch offices and deposit intermediaries, as well as the use of these deposits to fund its loan and investment portfolios. Sonabank is a Virginia state chartered bank. Sonabank provides a range of financial services to individuals, and small and medium sized businesses. The Company focuses on making loans secured primarily by commercial real estate and other types of secured and unsecured commercial loans to small and medium-sized businesses in various industries, as well as loans to individuals for a variety of purposes. It focuses on serving small to medium-sized businesses in its market with a range of services, including an array of commercial mortgage and non-mortgage loans.

Pacific Continental Company Profile

Pacific Continental Corporation is a bank holding company. The Company’s principal business activities are conducted through its subsidiary, Pacific Continental Bank (the Bank), an Oregon state-chartered bank with deposits insured by the Federal Deposit Insurance Corporation. The Bank operates in three primary markets: Eugene, Oregon, Portland; Oregon/Southwest Washington, and Seattle, Washington. As of December 31, 2016, the Bank operated 15 full-service offices in Oregon and Washington and two loan production offices in Washington and Colorado. The Bank primarily operates in large commercial markets and provides banking and related services designed for community-based businesses, nonprofit organizations, professional service providers and banking services for business owners. It provides traditional commercial and consumer banking services, including cash management products for businesses, online banking, safe deposit services debit and automated teller machine cards and others.

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