Analyzing GBank Financial (NASDAQ:GBFH) and Alerus Financial (NASDAQ:ALRS)

Alerus Financial (NASDAQ:ALRS) and GBank Financial (NASDAQ:GBFH) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, dividends, analyst recommendations, institutional ownership, risk and valuation.

Profitability

This table compares Alerus Financial and GBank Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Alerus Financial	6.87%	14.41%	1.55%
GBank Financial	15.44%	14.42%	1.75%

Insider & Institutional Ownership

51.2% of Alerus Financial shares are held by institutional investors. 4.3% of Alerus Financial shares are held by insiders. Comparatively, 32.4% of GBank Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Alerus Financial and GBank Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alerus Financial	$399.92 million	2.11	$17.44 million	$1.06	31.88
GBank Financial	$109.61 million	2.69	$20.93 million	$1.28	15.87

GBank Financial has lower revenue, but higher earnings than Alerus Financial. GBank Financial is trading at a lower price-to-earnings ratio than Alerus Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Alerus Financial and GBank Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alerus Financial	0	6	1	0	2.14
GBank Financial	1	1	4	0	2.50

Alerus Financial currently has a consensus price target of $35.50, suggesting a potential upside of 5.06%. GBank Financial has a consensus price target of $37.33, suggesting a potential upside of 83.82%. Given GBank Financial’s stronger consensus rating and higher probable upside, analysts clearly believe GBank Financial is more favorable than Alerus Financial.

Risk & Volatility

Alerus Financial has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, GBank Financial has a beta of 0.03, meaning that its stock price is 97% less volatile than the S&P 500.

Summary

GBank Financial beats Alerus Financial on 10 of the 14 factors compared between the two stocks.

About Alerus Financial

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that engages in the provision of various financial services to businesses and consumers. The company operates in four segments: Banking, Mortgage, Retirement and Benefit Services, and Wealth Management. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services in North Dakota, Minnesota, and Arizona; and retirement and benefit plans through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.

About GBank Financial

GBank Financial Holdings Inc. operates as a bank holding company for GBank which provides banking services to commercial and consumer customers principally in Nevada. The company offers business and personal checking and savings accounts. GBank Financial Holdings Inc. is based in Las Vegas, Nevada.