Potomac Bancshares (OTCMKTS:PTBS) vs. Eagle Bancorp (NASDAQ:EGBN) Head to Head Comparison

Potomac Bancshares (OTCMKTS:PTBS) and Eagle Bancorp (NASDAQ:EGBN) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitability, dividends, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Potomac Bancshares and Eagle Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Potomac Bancshares	0	0	0	0	0.00
Eagle Bancorp	1	2	0	1	2.25

Eagle Bancorp has a consensus price target of $28.67, indicating a potential upside of 0.44%. Given Eagle Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Eagle Bancorp is more favorable than Potomac Bancshares.

Dividends

Potomac Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.6%. Eagle Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Potomac Bancshares pays out 25.4% of its earnings in the form of a dividend. Eagle Bancorp pays out -1.1% 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.

Valuation and Earnings

This table compares Potomac Bancshares and Eagle Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Potomac Bancshares	$54.90 million	1.91	$10.60 million	$2.36	9.87
Eagle Bancorp	$634.26 million	1.37	-$138.05 million	($3.79)	-7.53

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

Risk and Volatility

Potomac Bancshares has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500. Comparatively, Eagle Bancorp has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.

Profitability

This table compares Potomac Bancshares and Eagle Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Potomac Bancshares	N/A	N/A	N/A
Eagle Bancorp	-18.65%	-10.03%	-1.10%

Insider & Institutional Ownership

5.3% of Potomac Bancshares shares are owned by institutional investors. Comparatively, 78.0% of Eagle Bancorp shares are owned by institutional investors. 4.4% of Potomac Bancshares shares are owned by insiders. Comparatively, 3.1% of Eagle Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Potomac Bancshares beats Eagle Bancorp on 9 of the 16 factors compared between the two stocks.

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.

About Eagle Bancorp

Eagle Bancorp, Inc. operates as the bank holding company for EagleBank that provides commercial and consumer banking services primarily in the United States. The company also offers various commercial and consumer lending products comprising commercial loans for working capital, equipment purchases, real estate lines of credit, and government contract financing; asset based lending and accounts receivable financing; construction and commercial real estate loans; business equipment financing; consumer home equity lines of credit, personal lines of credit, and term loans; consumer installment loans, such as auto and personal loans; personal credit cards; and residential mortgage loans. In addition, it provides online and mobile banking services; checking and saving accounts; and other deposit services, including cash management services, business sweep accounts, lock boxes, remote deposit captures, account reconciliation services, merchant card services, safety deposit boxes, and automated clearing house origination, as well as after-hours depositories and ATM services. Further, the company offers insurance products and services through a referral program; and treasury management services. The company serves sole proprietors, small and medium-sized businesses, partnerships, corporations, and non-profit organizations and associations, as well as investors. Eagle Bancorp, Inc. was incorporated in 1997 and is headquartered in Bethesda, Maryland.