First Business Financial Services (NASDAQ:FBIZ) & Peoples Bancorp (NASDAQ:PEBO) Head-To-Head Comparison

First Business Financial Services (NASDAQ:FBIZ) and Peoples Bancorp (NASDAQ:PEBO) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.

Institutional and Insider Ownership

60.1% of First Business Financial Services shares are held by institutional investors. Comparatively, 60.7% of Peoples Bancorp shares are held by institutional investors. 5.0% of First Business Financial Services shares are held by company insiders. Comparatively, 3.3% of Peoples Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

First Business Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 2.4%. Peoples Bancorp pays an annual dividend of $1.64 per share and has a dividend yield of 4.8%. First Business Financial Services pays out 22.9% of its earnings in the form of a dividend. Peoples Bancorp pays out 54.8% 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. First Business Financial Services has raised its dividend for 13 consecutive years and Peoples Bancorp has raised its dividend for 10 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for First Business Financial Services and Peoples Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Business Financial Services	0	0	4	0	3.00
Peoples Bancorp	0	4	3	0	2.43

First Business Financial Services presently has a consensus target price of $67.00, indicating a potential upside of 15.96%. Peoples Bancorp has a consensus target price of $34.10, indicating a potential downside of 0.08%. Given First Business Financial Services’ stronger consensus rating and higher possible upside, research analysts clearly believe First Business Financial Services is more favorable than Peoples Bancorp.

Volatility and Risk

First Business Financial Services has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, Peoples Bancorp has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.

Earnings & Valuation

This table compares First Business Financial Services and Peoples Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Business Financial Services	$279.25 million	1.73	$50.32 million	$5.95	9.71
Peoples Bancorp	$618.38 million	1.98	$106.78 million	$2.99	11.41

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

Profitability

This table compares First Business Financial Services and Peoples Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Business Financial Services	18.02%	14.77%	1.25%
Peoples Bancorp	17.27%	9.51%	1.17%

Summary

First Business Financial Services beats Peoples Bancorp on 11 of the 17 factors compared between the two stocks.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.

About Peoples Bancorp

Peoples Bancorp Inc. operates as the holding company for Peoples Bank that provides commercial and consumer banking products and services. The company accepts various deposit products, including demand deposit accounts, savings accounts, money market accounts, certificates of deposit, and governmental deposits; and provides commercial and industrial, commercial real estate, construction, finance, residential real estate, and consumer indirect and direct loans, as well as home equity lines of credit and overdrafts. It also offers debit and automated teller machine (ATM) cards; safe deposit rental facilities; money orders and cashier’s checks; and telephone, mobile, and online banking services. In addition, the company provides various life, health, and property and casualty insurance products; third-party insurance administration; interactive teller machines; insurance premium financing; check deposit and alert notification; commercial and technology equipment leasing; fiduciary and trust; underwriting, origination, and servicing of equipment leases, and equipment financing agreements; and asset management and administration services, as well as employee benefit, retirement, and health care plan administration services. Further, it offers brokerage services through an unaffiliated registered broker-dealers; insurance premium finance lending and leasing; and credit cards to individuals and businesses, as well as provides merchant credit card transaction processing, and person-to-person payment processing services. Peoples Bancorp Inc. was founded in 1902 and is headquartered in Marietta, Ohio.