Pacific Mercantile Bancorp (NASDAQ:PMBC) and Shore Bancshares (NASDAQ:SHBI) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.
This table compares Pacific Mercantile Bancorp and Shore Bancshares’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pacific Mercantile Bancorp||39.50%||20.75%||1.92%|
Valuation & Earnings
This table compares Pacific Mercantile Bancorp and Shore Bancshares’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Pacific Mercantile Bancorp||$55.95 million||3.15||$10.44 million||N/A||N/A|
|Shore Bancshares||$65.55 million||3.24||$11.26 million||N/A||N/A|
Shore Bancshares has higher revenue and earnings than Pacific Mercantile Bancorp.
This is a breakdown of current ratings and recommmendations for Pacific Mercantile Bancorp and Shore Bancshares, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pacific Mercantile Bancorp||0||0||2||0||3.00|
Pacific Mercantile Bancorp currently has a consensus target price of $11.00, indicating a potential upside of 36.65%. Shore Bancshares has a consensus target price of $23.00, indicating a potential upside of 37.97%. Given Shore Bancshares’ higher possible upside, analysts plainly believe Shore Bancshares is more favorable than Pacific Mercantile Bancorp.
Volatility and Risk
Pacific Mercantile Bancorp has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, Shore Bancshares has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.
Shore Bancshares pays an annual dividend of $0.32 per share and has a dividend yield of 1.9%. Pacific Mercantile Bancorp does not pay a dividend. Shore Bancshares has increased its dividend for 2 consecutive years.
Institutional & Insider Ownership
45.4% of Pacific Mercantile Bancorp shares are owned by institutional investors. Comparatively, 67.8% of Shore Bancshares shares are owned by institutional investors. 3.6% of Pacific Mercantile Bancorp shares are owned by insiders. Comparatively, 2.1% of Shore Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Shore Bancshares beats Pacific Mercantile Bancorp on 8 of the 13 factors compared between the two stocks.
Pacific Mercantile Bancorp Company Profile
Pacific Mercantile Bancorp operates as the holding company for Pacific Mercantile Bank that provides a range of commercial banking products and services to small and medium-size businesses, professional firms, and individuals in Southern California, the United States. The company's deposit products include checking accounts, interest-bearing term deposit accounts, savings and money market deposits, and time deposits. It also offers various loan products, such as commercial loans and credit lines, accounts receivable and inventory financing, small business administration guaranteed business loans, owner-occupied commercial real estate loans, working capital lines of credit and asset based lending, growth capital loans, equipment financing, letters of credit, and corporate credit cards. In addition, the company provides cash and treasury management solutions, automated clearinghouse payment and wire solutions, fraud protection services, remote deposit capture services, courier services, and online banking services; and letters of credit and import/export financing services. As of March 5, 2018, it operated seven offices located in Orange, Los Angeles, San Diego, and San Bernardino counties in Southern California. The company was founded in 1998 and is based in Costa Mesa, California.
Shore Bancshares Company Profile
Shore Bancshares, Inc. operates as a bank holding company for the Shore United Bank that provides various commercial banking products and services to individuals, businesses, and other organizations. The company operates through two segments, Community Banking, and Insurance Products and Services. It offers various deposit products, including checking, savings, and money market accounts; and regular and IRA certificates of deposit, as well as CDARS programs and cash management services. The company also provides commercial loans, such as secured and unsecured loans, working capital loans, lines of credit, term loans, accounts receivable financing, real estate acquisition and development loans, construction loans, and letters of credit, as well as commercial mortgages, and equipment and operating loans; and loans to consumers comprising mortgage, home equity, automobile, marine, installment, and other secured and unsecured personal lines of credit. In addition, it offers safe deposit boxes; debit and credit cards; direct deposit of payroll; merchant credit card clearing services; telephone, mobile, and Internet banking services; and automatic teller machine (ATM) services. Further, the company provides non-deposit products, such as mutual funds and annuities, and discount brokerage services; trust, asset management, and financial planning services; and insurance products and services to businesses and consumers, including property and casualty, life, marine, individual health, and long term care insurance, as well as pension and profit sharing plans, and retirement plans. It operates 21 full service branches, 23 ATMs, 2 loan production offices in Baltimore City, Baltimore County, Howard County, Kent County, Queen Anne's County, Caroline County, Talbot County, and Dorchester County in Maryland; Kent County, Delaware; and Accomack County, Virginia. Shore Bancshares, Inc. was founded in 1876 and is headquartered in Easton, Maryland.
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