Contrasting Potomac Bancshares (OTCMKTS:PTBS) & Eastern Bankshares (NASDAQ:EBC)

Eastern Bankshares (NASDAQ:EBC) and Potomac Bancshares (OTCMKTS:PTBS) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Eastern Bankshares and Potomac Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eastern Bankshares	0	3	3	0	2.50
Potomac Bancshares	0	0	0	0	0.00

Eastern Bankshares presently has a consensus price target of $22.13, suggesting a potential upside of 3.58%. Given Eastern Bankshares’ stronger consensus rating and higher possible upside, analysts plainly believe Eastern Bankshares is more favorable than Potomac Bancshares.

Earnings & Valuation

This table compares Eastern Bankshares and Potomac Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eastern Bankshares	$1.33 billion	3.39	$88.20 million	$0.41	52.10
Potomac Bancshares	$54.90 million	N/A	N/A	$2.16	9.21

Eastern Bankshares has higher revenue and earnings than Potomac Bancshares. Potomac Bancshares is trading at a lower price-to-earnings ratio than Eastern Bankshares, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Eastern Bankshares and Potomac Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastern Bankshares	8.32%	8.62%	1.26%
Potomac Bancshares	N/A	N/A	N/A

Dividends

Eastern Bankshares pays an annual dividend of $0.52 per share and has a dividend yield of 2.4%. Potomac Bancshares pays an annual dividend of $0.52 per share and has a dividend yield of 2.6%. Eastern Bankshares pays out 126.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Potomac Bancshares pays out 24.1% of its earnings in the form of a dividend. Eastern Bankshares has raised its dividend for 5 consecutive years. Potomac Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Eastern Bankshares has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Potomac Bancshares has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500.

Institutional and Insider Ownership

71.7% of Eastern Bankshares shares are held by institutional investors. Comparatively, 5.3% of Potomac Bancshares shares are held by institutional investors. 1.1% of Eastern Bankshares shares are held by company insiders. Comparatively, 4.4% of Potomac Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Eastern Bankshares beats Potomac Bancshares on 11 of the 15 factors compared between the two stocks.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.

About Potomac Bancshares

Potomac Bancshares, Inc. operates as the bank holding company for Bank of Charles Town that provides various banking products and services to individuals and businesses. The company offers checking, savings, and individual retirement accounts; and certificates of deposit (CD). It also provides personal loans, including new and used vehicle, home equity, unsecured home improvement and personal, retail equipment, and lot loans, as well as loans secured by CD, and home equity lines of credit; commercial loans for building or office purchases, commercial real estate and construction, and production and administrative equipment purchases; lines of credit; mortgage, commercial, term, residential and commercial construction, commercial real estate, and agricultural loans; and credit and debit cards. In addition, the company offers Card Pay, cash management, merchant, financial planning, trust and estate, investment management, wealth management, full-service brokerage, retirement and insurance planning and products, asset allocation and management, and college planning services, as well as telephone, mobile, and online banking services. Potomac Bancshares, Inc. was founded in 1871 and is based in Charles Town, West Virginia.