Peoples Financial Services (NASDAQ:PFIS) and Banc of California (NYSE:BANC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.

Volatility and Risk

Peoples Financial Services has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500. Comparatively, Banc of California has a beta of 1.41, indicating that its stock price is 41% more volatile than the S&P 500.

Insider and Institutional Ownership

25.8% of Peoples Financial Services shares are held by institutional investors. Comparatively, 99.3% of Banc of California shares are held by institutional investors. 7.7% of Peoples Financial Services shares are held by insiders. Comparatively, 11.1% of Banc of California shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Peoples Financial Services and Banc of California, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Peoples Financial Services 0 0 0 0 N/A
Banc of California 0 4 0 0 2.00

Banc of California has a consensus target price of $15.50, indicating a potential downside of 9.36%. Given Banc of California’s higher possible upside, analysts plainly believe Banc of California is more favorable than Peoples Financial Services.

Earnings & Valuation

This table compares Peoples Financial Services and Banc of California’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Peoples Financial Services $98.32 million 3.71 $24.92 million N/A N/A
Banc of California $446.71 million 1.95 $45.47 million $0.49 34.90

Banc of California has higher revenue and earnings than Peoples Financial Services.

Dividends

Peoples Financial Services pays an annual dividend of $1.40 per share and has a dividend yield of 2.8%. Banc of California pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Banc of California pays out 49.0% of its earnings in the form of a dividend. Peoples Financial Services has raised its dividend for 2 consecutive years. Peoples Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Peoples Financial Services and Banc of California’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Peoples Financial Services 25.40% 9.41% 1.16%
Banc of California 4.79% 7.67% 0.57%

Peoples Financial Services Company Profile

Peoples Financial Services Corp. operates as the bank holding company for Peoples Security Bank and Trust Company that provides financial services. The company accepts money market, NOW, savings, individual retirement, demand deposit, and certificates of deposit accounts. Its loan products include residential real estate, automobile, manufactured housing, personal, student, and home equity loans; and commercial real estate, working capital, construction, small business administration, and agricultural loans, as well as loans for equipment and other commercial needs, and mineral rights. The company also offers investment management, IRA trustee, estate administration, living and life insurance trust, trustee under will, guardianship, custodial/IRA custodial, and corporate trust services, as well as pension and profit sharing plans. In addition, it provides investment portfolio management, estate and business succession planning, annuities, insurance, retirement plan, and tax planning, as well as education funding strategies; and securities and brokerage, and investor services. Further, the company offers small business checking and merchant money market accounts, online and telephone banking, business credit cards, merchant line of credit, and financial checkup services. Additionally, it provides various other services, including remote deposit capture; automatic clearing house transactions; cash management services; automated teller machines; point of sale transactions; safe deposit boxes; night depository services; direct deposit; and official check services. The company serves business, non-profit, governmental, municipal agency, and professional customers, as well as retail customers through 27 full-service community banking offices located in Pennsylvania; and Broome County of New York. Peoples Financial Services Corp. was founded in 1905 and is headquartered in Scranton, Pennsylvania.

Banc of California Company Profile

Banc of California, Inc. operates as the bank holding company for Banc of California, National Association that provides banking products and services in the United States. The company offers deposit products, including checking, savings, money market, retirement, and interest and noninterest-bearing demand accounts, as well as certificates of deposits. It also provides various commercial and consumer loan products, such as commercial and industrial loans; commercial real estate loans; multifamily loans; construction and renovation loans; single family residential mortgage loans; warehouse loans; asset, insurance, or security-backed loans; home equity lines of credit; consumer and business lines of credit; small business administration loans; and other consumer loans. In addition, the company offers automated bill payment, cash and treasury management, foreign exchange, card payment, remote and mobile deposit capture, automated clearing house origination, wire transfer, direct deposit, and Internet banking services; and master demand accounts, interest rate swaps, and safe deposit boxes. As of December 31, 2018, it operated 32 full service branches in San Diego, Orange, Santa Barbara, and Los Angeles counties in California. The company was formerly known as First PacTrust Bancorp, Inc. and changed its name to Banc of California, Inc. in July 2013. Banc of California, Inc. was founded in 1941 and is headquartered in Santa Ana, California.

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