Critical Review: Anchor Bancorp (ANCB) vs. National Commerce (NCOM)

Anchor Bancorp (NASDAQ: ANCB) and National Commerce (NASDAQ:NCOM) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Valuation & Earnings

This table compares Anchor Bancorp and National Commerce’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Anchor Bancorp $24.54 million 2.52 $2.35 million $1.16 21.38
National Commerce $88.52 million 6.93 $17.85 million $1.83 22.68

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

Institutional & Insider Ownership

45.6% of Anchor Bancorp shares are owned by institutional investors. Comparatively, 47.9% of National Commerce shares are owned by institutional investors. 5.6% of Anchor Bancorp shares are owned by insiders. Comparatively, 19.4% of National Commerce shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Anchor Bancorp and National Commerce’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Anchor Bancorp 11.28% 4.31% 0.62%
National Commerce 20.45% 7.28% 1.02%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Anchor Bancorp and National Commerce, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Anchor Bancorp 0 0 0 0 N/A
National Commerce 0 3 0 0 2.00

National Commerce has a consensus price target of $43.00, indicating a potential upside of 3.61%. Given National Commerce’s higher probable upside, analysts plainly believe National Commerce is more favorable than Anchor Bancorp.

Volatility & Risk

Anchor Bancorp has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, National Commerce has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500.

Summary

National Commerce beats Anchor Bancorp on 12 of the 12 factors compared between the two stocks.

Anchor Bancorp Company Profile

Anchor Bancorp is the bank holding company of Anchor Bank (the Bank). The Bank is a community-based savings bank. As of June 30, 2016, the Bank primarily served Western Washington through its 10 full-service banking offices (including a Wal-Mart in-store location) located within Grays Harbor, Thurston, Lewis, Pierce and Mason counties, and a loan production office located in King County, Washington. It is in the business of attracting deposits from the public and utilizing those deposits to originate loans. The Bank offers a range of loan products. The Bank’s operations include commercial banking services, such as lending activities, deposit products and other cash management services. The Bank offers commercial real estate loans and multi-family loans primarily in Western Washington. The Bank offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit with a range of rates.

National Commerce Company Profile

National Commerce Corporation (NCC) is a financial holding company. The Company is engaged in the business of banking through its banking subsidiary, National Bank of Commerce (the Bank). The Company, through the Bank, provides a range of financial services to businesses, business owners and professionals. It holds interest in CBI Holding Company, LLC, which owns Corporate Billing, LLC, a transaction-based finance company that provides factoring, invoicing, collection and accounts receivable management services to transportation companies, and automotive parts and service providers across the United States and Canada. Its loan portfolio includes construction, land development and other land loans; loans secured by farmland; loans secured by one- to four-family residential properties; loans secured by multifamily residential properties; loans secured by nonfarm nonresidential properties; loans secured by real estate; commercial and industrial loans; consumer loans, and other loans.

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