1st Constitution Bancorp (NASDAQ:FCCY) and BankUnited (NYSE:BKU) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, valuation, profitability and institutional ownership.

Institutional & Insider Ownership

34.8% of 1st Constitution Bancorp shares are held by institutional investors. Comparatively, 94.7% of BankUnited shares are held by institutional investors. 14.6% of 1st Constitution Bancorp shares are held by insiders. Comparatively, 2.3% of BankUnited shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares 1st Constitution Bancorp and BankUnited’s 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 3.29 $6.92 million $1.06 18.49
BankUnited $1.36 billion 2.51 $614.27 million $2.65 12.27

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

Analyst Ratings

This is a summary of recent ratings and target prices for 1st Constitution Bancorp and BankUnited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
1st Constitution Bancorp 0 0 0 0 N/A
BankUnited 1 5 5 0 2.36

BankUnited has a consensus target price of $43.22, indicating a potential upside of 32.91%. Given BankUnited’s higher possible upside, analysts plainly believe BankUnited is more favorable than 1st Constitution Bancorp.

Risk & Volatility

1st Constitution Bancorp has a beta of 0.35, indicating that its share price is 65% less volatile than the S&P 500. Comparatively, BankUnited has a beta of 0.95, indicating that its share price is 5% 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 1.2%. BankUnited pays an annual dividend of $0.84 per share and has a dividend yield of 2.6%. 1st Constitution Bancorp pays out 22.6% of its earnings in the form of a dividend. BankUnited pays out 31.7% 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.

Profitability

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

Net Margins Return on Equity Return on Assets
1st Constitution Bancorp 14.43% 9.71% 1.00%
BankUnited 45.30% 11.47% 1.11%

Summary

BankUnited beats 1st Constitution Bancorp on 11 of the 15 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.

BankUnited Company Profile

BankUnited, Inc. operates as the bank holding company for BankUnited, National Association that provides a range of banking services to small and medium sized businesses, and individual and corporate customers in the United States. The company offers deposit products, such as checking, money market deposit, and savings accounts, as well as certificates of deposit; and treasury management services. Its loans portfolio includes small business loans, commercial real estate loans, equipment loans and leases, term loans, formula-based loans, municipal and non-profit loans and leases, commercial and residential mortgage warehouse lines of credit, letters of credit, and consumer loans, as well as purchases performing residential loans. The company also offers integrated on-line, mobile, and telephone banking services. As of December 31, 2017, it operated through a network of 87 branches located in 15 Florida counties; and 6 banking centers in the New York metropolitan area, as well as 89 automated teller machines. The company was formerly known as BU Financial Corporation. BankUnited, Inc. was founded in 2009 and is headquartered in Miami Lakes, Florida.

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