First Bancorp (NASDAQ: FNLC) and Pacific Mercantile Bancorp (NASDAQ:PMBC) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.
Volatility and Risk
First Bancorp has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, Pacific Mercantile Bancorp has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500.
32.3% of First Bancorp shares are owned by institutional investors. Comparatively, 44.3% of Pacific Mercantile Bancorp shares are owned by institutional investors. 7.2% of First Bancorp shares are owned by company insiders. Comparatively, 3.6% of Pacific Mercantile Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This is a breakdown of current ratings and target prices for First Bancorp and Pacific Mercantile Bancorp, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Pacific Mercantile Bancorp||0||0||2||0||3.00|
Pacific Mercantile Bancorp has a consensus target price of $11.00, indicating a potential upside of 11.68%. Given Pacific Mercantile Bancorp’s higher possible upside, analysts plainly believe Pacific Mercantile Bancorp is more favorable than First Bancorp.
Valuation & Earnings
This table compares First Bancorp and Pacific Mercantile Bancorp’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|First Bancorp||$73.38 million||4.27||$19.58 million||N/A||N/A|
|Pacific Mercantile Bancorp||$55.95 million||4.11||$10.44 million||N/A||N/A|
First Bancorp has higher revenue and earnings than Pacific Mercantile Bancorp.
First Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 3.3%. Pacific Mercantile Bancorp does not pay a dividend.
This table compares First Bancorp and Pacific Mercantile Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Pacific Mercantile Bancorp||20.82%||11.11%||0.98%|
First Bancorp beats Pacific Mercantile Bancorp on 9 of the 13 factors compared between the two stocks.
First Bancorp Company Profile
The First Bancorp, Inc. operates as the holding company for First National Bank that provides a range of banking products and services to individual and corporate customers. The company offers various deposit products, including demand, NOW, savings, money market, and certificates of deposit accounts. It also provides commercial loan products, such as mortgage loans to finance investments in real property comprising multi-family residential, commercial/retail, office, industrial, hotel, educational, and other specific or mixed use properties; loans to finance construction in owner- and non-owner occupied commercial real estate properties; and revolving and term loan obligations to business and corporate enterprises for the purpose of financing working capital or capital investment. In addition, the company offers municipal loans for capitalized expenditures, construction projects, or tax-anticipation notes; residential term loans that include amortizing home mortgages and construction loans, which include loans for owner-occupied residential construction; home equity loans and lines of credit; and consumer loans, which are amortizing loans to individuals collateralized by automobiles, pleasure crafts, and recreation vehicles, as well as unsecured short-term time notes. Further, it provides private banking, financial planning, investment management, and trust services to individuals, businesses, non-profit organizations, and municipalities. The First Bancorp, Inc. operates through 16 full-service banking offices in Lincoln, Knox, Hancock, Washington, and Penobscot counties in the Mid-Coast, Eastern, and Down East regions of Maine. The company was formerly known as First National Lincoln Corporation and changed its name to The First Bancorp, Inc. in April 2008. The First Bancorp, Inc. was founded in 1864 and is based in Damariscotta, Maine.
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.
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