Contrasting CPB (NYSE:CPF) & FS Bancorp (NASDAQ:FSBW)

FS Bancorp (NASDAQ:FSBW) and CPB (NYSE:CPF) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Profitability

This table compares FS Bancorp and CPB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FS Bancorp	12.81%	9.39%	0.92%
CPB	23.69%	14.75%	1.17%

Analyst Ratings

This is a summary of recent ratings and price targets for FS Bancorp and CPB, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FS Bancorp	0	3	1	0	2.25
CPB	0	3	2	1	2.67

FS Bancorp presently has a consensus target price of $45.00, suggesting a potential upside of 2.20%. CPB has a consensus target price of $40.33, suggesting a potential upside of 6.42%. Given CPB’s stronger consensus rating and higher possible upside, analysts plainly believe CPB is more favorable than FS Bancorp.

Dividends

FS Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.6%. CPB pays an annual dividend of $1.20 per share and has a dividend yield of 3.2%. FS Bancorp pays out 30.6% of its earnings in the form of a dividend. CPB pays out 36.3% 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. FS Bancorp has increased its dividend for 12 consecutive years and CPB has increased its dividend for 1 consecutive years.

Institutional & Insider Ownership

63.9% of FS Bancorp shares are held by institutional investors. Comparatively, 88.4% of CPB shares are held by institutional investors. 12.9% of FS Bancorp shares are held by insiders. Comparatively, 1.7% of CPB shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares FS Bancorp and CPB”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FS Bancorp	$219.52 million	1.49	$33.35 million	$3.79	11.62
CPB	$365.98 million	2.63	$77.48 million	$3.31	11.45

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

Volatility and Risk

FS Bancorp has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500. Comparatively, CPB has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Summary

CPB beats FS Bancorp on 13 of the 18 factors compared between the two stocks.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.

About CPB

Central Pacific Financial Corp. operates as the bank holding company for Central Pacific Bank that provides a range of commercial banking products and services to businesses, professionals, and individuals in the United States. It offers various deposit products and services, including checking, savings and time deposits, cash management and digital banking, trust, and retail brokerage services, as well as money market accounts and certificates of deposit. The company also provides various lending activities, such as commercial, commercial and residential mortgage, home equity, and consumer loans; and other products and services comprising debit cards, internet and mobile banking, cash management services, full-service ATMs, safe deposit boxes, international banking services, night depository facilities, foreign exchange, and wire transfers. In addition, it offers wealth management products and services that include non-deposit investment products, annuities, insurance, investment management, asset custody and general consultation, and planning services. The company was founded in 1954 and is headquartered in Honolulu, Hawaii.