Provident Financial Services (NYSE:PFS) and Frederick County Bancorp (MD) (NYSE:FCBI) Critical Analysis

Provident Financial Services (NYSE:PFS) and Frederick County Bancorp (MD) (OTCMKTS:FCBI) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Insider & Institutional Ownership

65.4% of Provident Financial Services shares are owned by institutional investors. 3.4% of Provident Financial Services shares are owned by insiders. Comparatively, 32.2% of Frederick County Bancorp (MD) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Provident Financial Services and Frederick County Bancorp (MD), as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Provident Financial Services 0 1 1 0 2.50
Frederick County Bancorp (MD) 0 0 0 0 N/A

Provident Financial Services currently has a consensus target price of $26.00, indicating a potential upside of 83.88%. Given Provident Financial Services’ higher probable upside, research analysts clearly believe Provident Financial Services is more favorable than Frederick County Bancorp (MD).

Valuation and Earnings

This table compares Provident Financial Services and Frederick County Bancorp (MD)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Provident Financial Services $435.26 million 2.14 $112.63 million $1.74 8.13
Frederick County Bancorp (MD) $18.62 million 3.11 $2.96 million N/A N/A

Provident Financial Services has higher revenue and earnings than Frederick County Bancorp (MD).

Profitability

This table compares Provident Financial Services and Frederick County Bancorp (MD)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Provident Financial Services 22.18% 6.89% 0.97%
Frederick County Bancorp (MD) 11.41% N/A N/A

Dividends

Provident Financial Services pays an annual dividend of $0.92 per share and has a dividend yield of 6.5%. Frederick County Bancorp (MD) pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. Provident Financial Services pays out 52.9% of its earnings in the form of a dividend. Provident Financial Services has increased its dividend for 9 consecutive years. Provident Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Provident Financial Services has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Frederick County Bancorp (MD) has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500.

Summary

Provident Financial Services beats Frederick County Bancorp (MD) on 11 of the 15 factors compared between the two stocks.

Provident Financial Services Company Profile

Provident Financial Services, Inc. operates as the holding company for Provident Bank that provides various banking services to individuals, families, and businesses in the United States. The company's deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA, and KEOGH products. Its loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, and retail and industrial properties; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, and marine loans. The company also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, it provides trust and estate administration services; and asset management services comprising investment management, asset allocation, trust and estate administration, financial planning, tax compliance and planning, and family office services to individuals, municipalities, non-profits, corporations, and pension funds. Further, the company sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. As of December 31, 2018, it operated 84 full-service branch offices in northern and central New Jersey, as well as in Pennsylvania. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.

Frederick County Bancorp (MD) Company Profile

Frederick County Bancorp, Inc. operates as the holding company for Frederick County Bank that provides various banking services to individuals and commercial enterprises in the Frederick County, Maryland. It offers deposit products, including personal checking accounts, savings accounts, money market accounts, certificates of deposit, individual retirement accounts, and health savings accounts; and business checking accounts, savings and money market accounts, and certificates of deposits. The company provides home equity, home equity fixed rate, mortgage, installment, vehicle, and unsecured loans, as well as home equity line of credit and lines of credit; and commercial loans, such as term loans, lines of credit, letters of credit, and real estate finance. It also offers cash management services comprising automated clearing house, wire origination, remote deposit capture, and zero balance account services. In addition, the company provides mobile deposit capture, overdraft protection, debit and credit card, automated teller machine, and night depository services; and business courier and merchant processing services, as well as online banking and bill pay services. The company was founded in 2001 and is headquartered in Frederick, Maryland.

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