Contrasting Anchor Bancorp (ANCB) and ESSA Bancorp (ESSA)

Anchor Bancorp (NASDAQ:ANCB) and ESSA Bancorp (NASDAQ:ESSA) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations and price targets for Anchor Bancorp and ESSA Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Anchor Bancorp 0 1 0 0 2.00
ESSA Bancorp 0 0 0 0 N/A

Anchor Bancorp currently has a consensus price target of $31.00, suggesting a potential upside of 19.18%. Given Anchor Bancorp’s higher possible upside, equities analysts plainly believe Anchor Bancorp is more favorable than ESSA Bancorp.

Dividends

ESSA Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 2.2%. Anchor Bancorp does not pay a dividend.

Earnings & Valuation

This table compares Anchor Bancorp and ESSA Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Anchor Bancorp $26.35 million 2.45 $2.19 million N/A N/A
ESSA Bancorp $72.32 million 2.63 $6.53 million N/A N/A

ESSA Bancorp has higher revenue and earnings than Anchor Bancorp.

Profitability

This table compares Anchor Bancorp and ESSA Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Anchor Bancorp 9.07% 7.23% 1.02%
ESSA Bancorp 9.03% 3.64% 0.36%

Risk & Volatility

Anchor Bancorp has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, ESSA Bancorp has a beta of 0.29, indicating that its stock price is 71% less volatile than the S&P 500.

Insider and Institutional Ownership

43.9% of Anchor Bancorp shares are held by institutional investors. Comparatively, 45.2% of ESSA Bancorp shares are held by institutional investors. 5.6% of Anchor Bancorp shares are held by insiders. Comparatively, 8.8% of ESSA Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

ESSA Bancorp beats Anchor Bancorp on 7 of the 12 factors compared between the two stocks.

About Anchor Bancorp

Anchor Bancorp operates as the bank holding company for Anchor Bank that provides various banking products and services in Western Washington. The company accepts deposit products, such as checking, money market deposit, and savings accounts, as well as certificates of deposit. Its loan products include commercial and multi-family real estate, one-to-four family real estate, construction and land, consumer, and commercial business loans. The company also offers cash management services. Its investment portfolio consists of mortgage-backed securities, municipal bonds, and mutual funds. The company operates nine full-service banking offices located in Grays Harbor, Thurston, Lewis, and Pierce counties, as well as a loan production office located in King County, Washington. Anchor Bancorp was founded in 1907 and is headquartered in Lacey, Washington.

About ESSA Bancorp

ESSA Bancorp, Inc. operates as the holding company for ESSA Bank & Trust that provides a range of financial services to individuals, families, and businesses in Pennsylvania. Its deposit products include savings accounts, interest bearing demand accounts, checking accounts, money market accounts, club accounts, certificates of deposit and IRAs, and other qualified plan accounts, as well as commercial checking accounts for businesses. The company's loan portfolio comprises first mortgage loans for the purchase, construction, or refinancing of one- to four-family residential real estate property; commercial real estate loans; home equity loans and lines of credit; and commercial and consumer loans, including indirect auto loans, as well as loans secured by deposits and personal unsecured loans. In addition, it offers insurance benefits consulting services, such as health insurance, life insurance, short term and long term disability, dental, vision, 401(K) retirement planning, and individual health products, as well as asset management and trust, and investment services. As of September 30, 2017, the company operated 25 full-service banking offices, including 10 offices in Monroe County, 3 offices in Lehigh County, 6 offices in Northampton County, 1 office in Lackawanna County, 1 office in Luzerne County, 1 office in Chester County, 2 offices in Delaware County, and 1 office in Montgomery County, Pennsylvania. ESSA Bancorp, Inc. was founded in 1916 and is based in Stroudsburg, Pennsylvania.

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