Sussex Bancorp (NASDAQ: SBBX) and Guaranty Bancorp (NASDAQ:GBNK) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Insider & Institutional Ownership

52.7% of Sussex Bancorp shares are owned by institutional investors. Comparatively, 70.5% of Guaranty Bancorp shares are owned by institutional investors. 17.6% of Sussex Bancorp shares are owned by insiders. Comparatively, 8.4% of Guaranty Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Sussex Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 0.9%. Guaranty Bancorp pays an annual dividend of $0.50 per share and has a dividend yield of 1.7%. Sussex Bancorp pays out 18.8% of its earnings in the form of a dividend. Guaranty Bancorp pays out 37.6% 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.

Risk and Volatility

Sussex Bancorp has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500. Comparatively, Guaranty Bancorp has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Sussex Bancorp and Guaranty Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sussex Bancorp 0 0 1 0 3.00
Guaranty Bancorp 0 3 3 0 2.50

Sussex Bancorp currently has a consensus price target of $28.50, indicating a potential upside of 12.65%. Guaranty Bancorp has a consensus price target of $29.13, indicating a potential upside of 0.43%. Given Sussex Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Sussex Bancorp is more favorable than Guaranty Bancorp.

Profitability

This table compares Sussex Bancorp and Guaranty Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sussex Bancorp 15.13% 9.43% 0.75%
Guaranty Bancorp 24.17% 11.32% 1.20%

Earnings & Valuation

This table compares Sussex Bancorp and Guaranty Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sussex Bancorp $32.87 million 4.58 $7.62 million $1.28 19.77
Guaranty Bancorp $131.60 million 6.15 $37.13 million $1.33 21.80

Guaranty Bancorp has higher revenue and earnings than Sussex Bancorp. Sussex Bancorp is trading at a lower price-to-earnings ratio than Guaranty Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Guaranty Bancorp beats Sussex Bancorp on 12 of the 16 factors compared between the two stocks.

About Sussex Bancorp

Sussex Bancorp is a bank holding company for Sussex Bank (the Bank). The Company’s primary business is the ownership and supervision of the Bank. The Company has two business segments: banking and financial services, and insurance services. The Company, through the Bank, conducts a traditional commercial banking business, and offer services, including personal and business checking accounts and time deposits, money market accounts and savings accounts. The Company, through the Bank’s subsidiary, Tri-State, operates a full service general insurance agency, offering both commercial and personal lines of insurance. The Company’s service area primarily consists of Sussex, Morris and Bergen Counties in New Jersey, and Orange and Queens Counties, New York. The Company’s loan portfolio includes commercial and industrial consumer loans, construction loans, commercial real estate loans, residential real estate loans, and consumer and other loans.

About Guaranty Bancorp

Guaranty Bancorp is a bank holding company. The Company’s bank subsidiary is Guaranty Bank and Trust Company (the Bank). As of December 31, 2016, the Company operated 32 branches and two investment management firms, Private Capital Management LLC (PCM) and Cherry Hills Investment Advisors Inc. (CHIA), in Colorado through the Bank. The Bank provides banking and other financial services, including commercial and industrial loans, real estate loans, construction loans, consumer loans and agriculture loans across its targeted Colorado markets to consumers and small to medium-sized businesses, including the owners and employees of those businesses. Along with loans and depository services, the Bank also provides wealth management solutions, including trust and investment management services. The Bank’s commercial and industrial loan portfolio consists of operating loans secured by business assets.

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