Critical Analysis: 1st Constitution Bancorp (FCCY) & Pacific Continental (PCBK)
1st Constitution Bancorp (NASDAQ: FCCY) and Pacific Continental (NASDAQ:PCBK) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Valuation & Earnings
This table compares 1st Constitution Bancorp and Pacific Continental’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|1st Constitution Bancorp||$49.90 million||3.16||$6.93 million||$0.83||23.49|
Risk and Volatility
1st Constitution Bancorp has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Pacific Continental has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500.
Institutional & Insider Ownership
27.8% of 1st Constitution Bancorp shares are owned by institutional investors. Comparatively, 67.5% of Pacific Continental shares are owned by institutional investors. 14.5% of 1st Constitution Bancorp shares are owned by company insiders. Comparatively, 4.8% of Pacific Continental shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares 1st Constitution Bancorp and Pacific Continental’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|1st Constitution Bancorp||13.64%||8.09%||0.84%|
This is a summary of current recommendations for 1st Constitution Bancorp and Pacific Continental, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|1st Constitution Bancorp||0||1||0||0||2.00|
1st Constitution Bancorp currently has a consensus target price of $18.00, indicating a potential downside of 7.69%. Pacific Continental has a consensus target price of $28.00, indicating a potential upside of 0.00%. Given Pacific Continental’s higher possible upside, analysts clearly believe Pacific Continental is more favorable than 1st Constitution Bancorp.
1st Constitution Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. Pacific Continental pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. 1st Constitution Bancorp pays out 28.9% of its earnings in the form of a dividend. Pacific Continental pays out 38.9% 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.
Pacific Continental beats 1st Constitution Bancorp on 10 of the 14 factors compared between the two stocks.
1st Constitution Bancorp Company Profile
1st Constitution Bancorp is the bank holding company for 1st Constitution Bank (the Bank). The Bank is a commercial bank, which is engaged in the business of commercial and retail banking. The Company operates through the Community Banking segment. The Community Banking segment consists of construction, commercial, retail and mortgage banking operations. As a community bank, the Bank offers a range of services (including demand, savings and time deposits and commercial and consumer/installment loans) to individuals, small businesses and not-for-profit organizations principally in the Fort Lee area of Bergen County and in Middlesex, Mercer, Somerset and Monmouth Counties of New Jersey. The Bank’s Mortgage Warehouse Funding Group offers revolving lines of credit that are available to licensed mortgage banking companies (the Warehouse Line of Credit). The Bank’s investment activities are classified as available for sale and held to maturity securities.
Pacific Continental Company Profile
Pacific Continental Corporation is a bank holding company. The Company’s principal business activities are conducted through its subsidiary, Pacific Continental Bank (the Bank), an Oregon state-chartered bank with deposits insured by the Federal Deposit Insurance Corporation. The Bank operates in three primary markets: Eugene, Oregon, Portland; Oregon/Southwest Washington, and Seattle, Washington. As of December 31, 2016, the Bank operated 15 full-service offices in Oregon and Washington and two loan production offices in Washington and Colorado. The Bank primarily operates in large commercial markets and provides banking and related services designed for community-based businesses, nonprofit organizations, professional service providers and banking services for business owners. It provides traditional commercial and consumer banking services, including cash management products for businesses, online banking, safe deposit services debit and automated teller machine cards and others.
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