Peapack-Gladstone Financial (NASDAQ:PGC) vs. First Bank (NASDAQ:FRBA) Critical Contrast

Peapack-Gladstone Financial (NASDAQ:PGC) and First Bank (NASDAQ:FRBA) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Dividends

Peapack-Gladstone Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.5%. First Bank pays an annual dividend of $0.36 per share and has a dividend yield of 2.3%. Peapack-Gladstone Financial pays out 8.1% of its earnings in the form of a dividend. First Bank pays out 21.6% 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.

Insider & Institutional Ownership

72.8% of Peapack-Gladstone Financial shares are held by institutional investors. Comparatively, 64.9% of First Bank shares are held by institutional investors. 5.8% of Peapack-Gladstone Financial shares are held by insiders. Comparatively, 13.1% of First Bank shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Peapack-Gladstone Financial and First Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peapack-Gladstone Financial	$444.61 million	1.76	$37.33 million	$2.48	17.83
First Bank	$245.83 million	1.63	$43.66 million	$1.67	9.57

First Bank has lower revenue, but higher earnings than Peapack-Gladstone Financial. First Bank is trading at a lower price-to-earnings ratio than Peapack-Gladstone Financial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Peapack-Gladstone Financial has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500. Comparatively, First Bank has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Profitability

This table compares Peapack-Gladstone Financial and First Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peapack-Gladstone Financial	9.60%	6.75%	0.59%
First Bank	17.02%	9.69%	1.05%

Analyst Recommendations

This is a summary of recent ratings and price targets for Peapack-Gladstone Financial and First Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peapack-Gladstone Financial	0	1	3	0	2.75
First Bank	1	1	2	0	2.25

Peapack-Gladstone Financial currently has a consensus target price of $40.50, suggesting a potential downside of 8.41%. First Bank has a consensus target price of $17.50, suggesting a potential upside of 9.51%. Given First Bank’s higher probable upside, analysts clearly believe First Bank is more favorable than Peapack-Gladstone Financial.

Summary

Peapack-Gladstone Financial beats First Bank on 9 of the 16 factors compared between the two stocks.

About Peapack-Gladstone Financial

Peapack-Gladstone Financial Corporation operates as the bank holding company for Peapack-Gladstone Bank that provides private banking and wealth management services in the United States. The company operates in two segments, Banking and Peapack Private. It offers checking and savings accounts, money market and interest-bearing checking accounts, certificates of deposit, and individual retirement accounts. The company also provides working capital lines of credit, term loans for fixed asset acquisitions, commercial mortgages, multi-family mortgages, and other forms of asset-based financing services; and residential mortgages, home equity lines of credit, and other second mortgage loans. In addition, it offers corporate and industrial (C&I) and equipment finance, commercial real estate, multifamily, residential, and consumer lending activities; treasury management services; C&I advisory services; escrow management; deposit generation; investment management services; personal trust services, including services as executor, trustee, administrator, custodian, and guardian; and other financial planning, tax preparation, and advisory services. Further, the company provides telephone and Internet banking, merchant credit card, and customer support sales services. Its private banking clients include businesses, non-profits, and consumers; wealth management clients comprise individuals, families, foundations, endowments, trusts, and estates; and commercial loan clients include business owners, professionals, retailers, contractors, and real estate investors. The company operates its private banking locations in Bedminster, Morristown, Princeton, and Teaneck, New Jersey; and branches in Somerset, Morris, Hunterdon, and Union counties, as well as operates automated teller machines. Peapack-Gladstone Financial Corporation was founded in 1921 and is headquartered in Bedminster, New Jersey.

About First Bank

First Bank provides various banking products and services to small to mid-sized businesses and individuals. The company accepts various deposits, including non-interest-bearing demand deposits, interest bearing demand accounts, money market accounts, savings accounts, and certificates of deposit, as well as commercial checking accounts. It also offers various loan products comprising commercial and industrial loans, which include line of credit, inventory, equipment, and short-term working capital financing; commercial real estate loans, such as owner-occupied, investor, construction and development, and multi-family loans; residential real estate loans comprising residential mortgages, first and second lien home equity loans, and revolving lines of credit; and consumer and other loans consists of auto, personal, traditional installment, and other loans. The company also provides electronic banking services, including Internet and mobile banking, electronic bill payment, and banking by phone; ATM and debit cards, and wire and ACH transfer services; remote deposit capture; and cash management services, as well as engages in the capital markets activities. It operates full-service branches in Cinnaminson, Delanco, Denville, Ewing, Fairfield, Flemington, Hamilton, Lawrence, Monroe, Pennington, Randolph, Somerset, and Williamstown, New Jersey; Doylestown, Trevose, Warminster, and West Chester, Paoli, Malvern, Coventry, Devon, Lionville, and Glen Mills Pennsylvania; and Palm Beach, Florida. First Bank was incorporated in 2007 and is headquartered in Hamilton, New Jersey.