First Business Financial Services (NASDAQ: FBIZ) and BCB Bancorp, Inc. (NJ) (NASDAQ:BCBP) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Profitability

This table compares First Business Financial Services and BCB Bancorp, Inc. (NJ)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Business Financial Services 12.63% 7.20% 0.66%
BCB Bancorp, Inc. (NJ) 14.19% 9.04% 0.65%

Valuation and Earnings

This table compares First Business Financial Services and BCB Bancorp, Inc. (NJ)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Business Financial Services $96.11 million 2.11 $14.90 million $1.37 16.90
BCB Bancorp, Inc. (NJ) $77.48 million 2.82 $8.00 million $0.96 15.16

First Business Financial Services has higher revenue and earnings than BCB Bancorp, Inc. (NJ). BCB Bancorp, Inc. (NJ) is trading at a lower price-to-earnings ratio than First Business Financial Services, indicating that it is currently the more affordable of the two stocks.

Dividends

First Business Financial Services pays an annual dividend of $0.52 per share and has a dividend yield of 2.2%. BCB Bancorp, Inc. (NJ) pays an annual dividend of $0.56 per share and has a dividend yield of 3.8%. First Business Financial Services pays out 38.0% of its earnings in the form of a dividend. BCB Bancorp, Inc. (NJ) pays out 58.3% 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.

Analyst Ratings

This is a breakdown of recent ratings for First Business Financial Services and BCB Bancorp, Inc. (NJ), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Business Financial Services 0 1 0 0 2.00
BCB Bancorp, Inc. (NJ) 0 0 2 0 3.00

First Business Financial Services presently has a consensus price target of $25.00, suggesting a potential upside of 7.99%. BCB Bancorp, Inc. (NJ) has a consensus price target of $14.50, suggesting a potential downside of 0.34%. Given First Business Financial Services’ higher probable upside, equities analysts plainly believe First Business Financial Services is more favorable than BCB Bancorp, Inc. (NJ).

Volatility & Risk

First Business Financial Services has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500. Comparatively, BCB Bancorp, Inc. (NJ) has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500.

Institutional and Insider Ownership

58.9% of First Business Financial Services shares are held by institutional investors. Comparatively, 32.5% of BCB Bancorp, Inc. (NJ) shares are held by institutional investors. 8.3% of First Business Financial Services shares are held by insiders. Comparatively, 16.8% of BCB Bancorp, Inc. (NJ) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

First Business Financial Services beats BCB Bancorp, Inc. (NJ) on 9 of the 16 factors compared between the two stocks.

First Business Financial Services Company Profile

First Business Financial Services, Inc. (FBFS) is a bank holding company. The Company engages in the commercial banking business through its bank subsidiaries, which include First Business Bank (FBB), First Business Bank-Milwaukee (FBB-Milwaukee) and Alterra Bank (Alterra) (FBB and FBB-Milwaukee and, together with FBB, the Banks). The operations of FBFS are conducted through the Banks and certain subsidiaries of FBB. The Banks operate as business banks focusing on delivering a line of commercial banking products, including commercial loans and commercial real estate loans, and services to meet the needs of small- and medium-sized businesses, business owners, executives, professionals and high net worth individuals. Its business lines include commercial lending, asset-based financing, equipment financing, small business administration (SBA) lending, treasury management services, and trust and investment services. Its investments include short-term investments and securities.

BCB Bancorp, Inc. (NJ) Company Profile

BCB Bancorp, Inc. is the holding company parent of BCB Community Bank (the Bank). The Bank is a community-oriented financial institution. Its business is to offer Federal Deposit Insurance Corporation (FDIC)-insured deposit products and to invest funds held in deposit accounts at the Bank, together with funds generated from operations, in loans and investment securities. It offers loans, including commercial and multi-family real estate loans, one- to four-family mortgage loans, home equity loans, construction loans, consumer loans and commercial business loans; FDIC-insured deposit products, such as savings and club accounts, interest and non-interest bearing demand accounts, money market accounts, certificates of deposit and individual retirement accounts, and retail and commercial banking services, including wire transfers, money orders, safe deposit boxes, a night depository, debit cards, online banking, gift cards, fraud detection and automated teller services.

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