1st Constitution Bancorp (NASDAQ: FCCY) and Atlantic Coast Financial (NASDAQ:ACFC) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.

Volatility & Risk

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1st Constitution Bancorp has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Atlantic Coast Financial has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Dividends

1st Constitution Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Atlantic Coast Financial does not pay a dividend. 1st Constitution Bancorp pays out 22.6% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares 1st Constitution Bancorp and Atlantic Coast Financial’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 3.65 $6.92 million $1.06 20.57
Atlantic Coast Financial $41.36 million 3.84 $3.16 million $0.34 30.06

1st Constitution Bancorp has higher revenue and earnings than Atlantic Coast Financial. 1st Constitution Bancorp is trading at a lower price-to-earnings ratio than Atlantic Coast Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 1st Constitution Bancorp and Atlantic Coast Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
1st Constitution Bancorp 13.64% 8.04% 0.83%
Atlantic Coast Financial 7.66% 5.77% 0.56%

Insider and Institutional Ownership

27.3% of 1st Constitution Bancorp shares are owned by institutional investors. Comparatively, 61.5% of Atlantic Coast Financial shares are owned by institutional investors. 14.5% of 1st Constitution Bancorp shares are owned by company insiders. Comparatively, 10.9% of Atlantic Coast Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for 1st Constitution Bancorp and Atlantic Coast Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
1st Constitution Bancorp 0 1 0 0 2.00
Atlantic Coast Financial 0 1 0 0 2.00

1st Constitution Bancorp presently has a consensus target price of $18.00, suggesting a potential downside of 17.43%. Atlantic Coast Financial has a consensus target price of $8.50, suggesting a potential downside of 16.83%. Given Atlantic Coast Financial’s higher possible upside, analysts clearly believe Atlantic Coast Financial is more favorable than 1st Constitution Bancorp.

Summary

1st Constitution Bancorp beats Atlantic Coast Financial on 8 of the 14 factors compared between the two stocks.

1st Constitution Bancorp Company Profile

1st Constitution Bancorp operates as the bank holding company for 1st Constitution Bank that provides commercial and retail banking services in the central and northeastern New Jersey areas. The company offers deposit products, including interest bearing demand deposits, such as interest-bearing checking accounts, money market accounts, and NOW accounts; and non-interest bearing demand, savings, and time deposits, as well as certificates of deposit. It also provides commercial loans, including term loans, lines of credit, and loans secured by equipment and receivables; secured and unsecured short-to-medium term commercial loans to businesses for working capital, business expansion, and the purchase of equipment and machinery; and construction loans to real estate developers for the acquisition, development, and construction of residential and commercial properties. In addition, the company offers residential first mortgage loans secured by owner-occupied property; construction loans; reverse mortgages; second mortgage home improvement loans; home equity lines of credit; and non-residential consumer loans for automobiles, recreation vehicles, and boats, as well as secured and unsecured personal loans, and deposit account secured loans. It serves corporations, individuals, partnerships, and other community organizations, as well as small businesses and not-for-profit organizations. As of December 31, 2017, the company operated through 17 branch offices, as well as 2 residential mortgage loan production offices in New Jersey. 1st Constitution Bancorp was founded in 1989 and is based in Cranbury, New Jersey.

Atlantic Coast Financial Company Profile

Atlantic Coast Financial Corporation operates as the holding company for Atlantic Coast Bank that provides various banking services to individual and business customers primarily in Northeast Florida, Central Florida, and Southeast Georgia. It accepts various deposit products, including noninterest-bearing and interest-bearing demand, savings, money market demand, time deposit, and checking accounts, as well as certificates of deposit. The company also offers one-to four-family residential first and second mortgage, home-equity, commercial real estate, commercial and residential construction, multi-family real estate, commercial business, and automobile and other consumer loans. As of December 31, 2016, it operated 10 full-service branch offices and 5 lending offices. The company was founded in 1939 and is headquartered in Jacksonville, Florida.

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