Bay Banks of Virginia (OTCMKTS: BAYK) and Blue Hills Bancorp (NASDAQ:BHBK) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, dividends, valuation and profitability.

Volatility and Risk

Bay Banks of Virginia has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500. Comparatively, Blue Hills Bancorp has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500.

Institutional and Insider Ownership

10.5% of Bay Banks of Virginia shares are owned by institutional investors. Comparatively, 52.1% of Blue Hills Bancorp shares are owned by institutional investors. 7.3% of Bay Banks of Virginia shares are owned by company insiders. Comparatively, 6.6% of Blue Hills Bancorp 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.

Dividends

Bay Banks of Virginia pays an annual dividend of $0.08 per share and has a dividend yield of 0.8%. Blue Hills Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Bay Banks of Virginia pays out 50.0% of its earnings in the form of a dividend. Blue Hills Bancorp pays out 107.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Blue Hills Bancorp has raised its dividend for 2 consecutive years. Blue Hills Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Bay Banks of Virginia and Blue Hills Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bay Banks of Virginia 0 0 0 0 N/A
Blue Hills Bancorp 0 1 1 0 2.50

Blue Hills Bancorp has a consensus price target of $22.50, suggesting a potential upside of 3.69%. Given Blue Hills Bancorp’s higher probable upside, analysts clearly believe Blue Hills Bancorp is more favorable than Bay Banks of Virginia.

Profitability

This table compares Bay Banks of Virginia and Blue Hills Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bay Banks of Virginia 0.82% 2.18% 0.25%
Blue Hills Bancorp 17.02% 5.02% 0.76%

Valuation and Earnings

This table compares Bay Banks of Virginia and Blue Hills Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bay Banks of Virginia $37.38 million 3.52 -$1.27 million $0.16 62.13
Blue Hills Bancorp $101.86 million 5.72 $16.48 million $0.56 38.75

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

Summary

Blue Hills Bancorp beats Bay Banks of Virginia on 12 of the 16 factors compared between the two stocks.

Bay Banks of Virginia Company Profile

Bay Banks of Virginia, Inc., through its subsidiaries, provides various banking products and services to businesses, professionals, and consumers in Virginia. The company accepts checking accounts, savings accounts, money market accounts, cash management accounts, certificates of deposit, and individual retirement accounts. Its loan products include commercial and industrial loans, such as small business loans, asset based loans, and other secured and unsecured loans and lines of credit; residential and commercial mortgages; home equity loans; consumer installment loans; and consumer loans comprising automobile and boat financing, home improvement loans, and unsecured personal loans. It also offers credit cards; investment accounts; and insurance, online banking, telephone banking, mobile banking, analysis checking, cash management deposit, wire, direct deposit payroll, and remote deposit services, as well as a line of commercial lending options. In addition, the company offers management services, including estate planning and settlement, revocable and irrevocable living trusts, testamentary trusts, custodial accounts, investment management accounts, and managed and self-directed rollover individual retirement accounts for personal and corporate trusts. As of March 28, 2018, it operated 18 banking offices in the Richmond market area, the Northern Neck region, Tri-Cities area of Petersburg, Hopewell and Colonial Heights, Middlesex County, and Suffolk. Bay Banks of Virginia, Inc. was founded in 1930 and is headquartered in Richmond, Virginia.

Blue Hills Bancorp Company Profile

Blue Hills Bancorp, Inc. operates as the bank holding company for Blue Hills Bank that provides financial services to individuals, families, small to mid-size businesses, government, and non-profit organizations in Massachusetts. The company accepts passbook and statement savings, money market, commercial and regular checking, as well as certificates of deposit and IRAs. It also offers 1-4 family residential mortgage, commercial real estate, commercial business, construction, and consumer loans, as well as home equity loans and lines of credit; and investment securities. At December 31, 2017, the company operated through a network of 11 full-service branch offices located in Boston, Dedham, Hyde Park, Milton, Nantucket, Norwood, West Roxbury, and Westwood, Massachusetts. Blue Hills Bancorp, Inc. was founded in 1871 and is headquartered in Norwood, Massachusetts.

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