Comparing PCB Bancorp (NASDAQ:PCB) & American Business Bank (OTCMKTS:AMBZ)

PCB Bancorp (NASDAQ:PCB) and American Business Bank (OTCMKTS:AMBZ) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.

Insider & Institutional Ownership

33.0% of PCB Bancorp shares are held by institutional investors. Comparatively, 9.9% of American Business Bank shares are held by institutional investors. 25.9% of PCB Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares PCB Bancorp and American Business Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PCB Bancorp	$209.37 million	1.65	$37.45 million	$2.57	9.43
American Business Bank	$199.36 million	3.23	$54.20 million	$5.86	12.36

American Business Bank has lower revenue, but higher earnings than PCB Bancorp. PCB Bancorp is trading at a lower price-to-earnings ratio than American Business Bank, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares PCB Bancorp and American Business Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PCB Bancorp	17.89%	12.03%	1.14%
American Business Bank	26.85%	N/A	N/A

Volatility and Risk

PCB Bancorp has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500. Comparatively, American Business Bank has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for PCB Bancorp and American Business Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PCB Bancorp	0	3	1	0	2.25
American Business Bank	0	0	0	0	0.00

PCB Bancorp presently has a consensus price target of $24.50, indicating a potential upside of 1.11%. Given PCB Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe PCB Bancorp is more favorable than American Business Bank.

Dividends

PCB Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 3.6%. American Business Bank pays an annual dividend of $1.20 per share and has a dividend yield of 1.7%. PCB Bancorp pays out 34.2% of its earnings in the form of a dividend. American Business Bank pays out 20.5% 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. PCB Bancorp has raised its dividend for 7 consecutive years. PCB Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

PCB Bancorp beats American Business Bank on 11 of the 17 factors compared between the two stocks.

About PCB Bancorp

PCB Bancorp operates as the bank holding company for PCB Bank that provides various banking products and services to small to medium-sized businesses, individuals, and professionals in Southern California. The company offers demand, savings, money market, and time deposits, as well as certificates of deposit; and trade finance, remote deposit capture, courier deposit services, positive pay services, zero balance accounts, and sweep accounts. It also provides real estate loans, including commercial and residential, Small Business Administration (SBA) property, and construction loans; commercial and industrial loans, such as commercial term and lines of credit, SBA commercial term, and SBA Paycheck Protection Program loans; and consumer loans comprising residential mortgage; and automobile loans, unsecured lines of credit, and term loans. In addition, the company offers access to account balances, online transfers, and online bill payment and electronic delivery of customer statements; and mobile banking solutions that include remote check deposit and mobile bill pay. Further, it provides automated teller machines; and banking by telephone, mail, personal appointment, debit cards, direct deposit, and cashier's checks, as well as treasury management, wire transfer, and automated clearing house services. The company operates through a network of full-service branches in Los Angeles and Orange counties, California; Carrollton and Dallas, Texas; and Englewood Cliffs and Palisade Park, New Jersey, and Bayside, New York. It also operates loan production offices in Los Angeles and Orange Counties, California; Annandale, Virginia; Atlanta, Georgia; Bellevue, Washington; Aurora, Colorado; and Carrollton, Texas. The company was formerly known as Pacific City Financial Corporation and changed its name to PCB Bancorp in July 2019. PCB Bancorp was founded in 2003 and is headquartered in Los Angeles, California.

About American Business Bank

American Business Bank, a California-chartered bank, provides banking products and services to small and medium-sized firms, non-profits, business executives, and professionals in Southern California. The company offers credit and depository; treasury management; asset-based lending; SBA lending; international banking comprising money transfers, import and export commercial letters of credit, standby letters of credit, documentary and clean collections, and foreign currency exchange services; and consulting and referral services. It operates regional loan production offices located in North Orange County, Orange County, South Bay, San Fernando Valley, Riverside County, Inland Empire, and Long Beach. American Business Bank was incorporated in 1998 and is headquartered in Los Angeles, California.