Reviewing SR Bancorp (NASDAQ:SRBK) and ACNB (NASDAQ:ACNB)

ACNB (NASDAQ:ACNB) and SR Bancorp (NASDAQ:SRBK) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, profitability, risk, earnings, analyst recommendations, dividends and valuation.

Analyst Recommendations

This is a summary of current ratings and recommmendations for ACNB and SR Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ACNB	0	3	2	0	2.40
SR Bancorp	0	1	1	0	2.50

ACNB currently has a consensus target price of $64.50, suggesting a potential downside of 2.20%. SR Bancorp has a consensus target price of $19.00, suggesting a potential downside of 3.85%. Given ACNB’s higher possible upside, research analysts plainly believe ACNB is more favorable than SR Bancorp.

Earnings & Valuation

This table compares ACNB and SR Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ACNB	$191.82 million	3.50	$37.05 million	$5.27	12.51
SR Bancorp	$51.80 million	3.09	$3.35 million	$0.45	43.91

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

Profitability

This table compares ACNB and SR Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ACNB	27.15%	13.78%	1.77%
SR Bancorp	6.47%	1.61%	0.27%

Risk & Volatility

ACNB has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, SR Bancorp has a beta of 0.55, indicating that its share price is 45% less volatile than the S&P 500.

Insider & Institutional Ownership

32.4% of ACNB shares are owned by institutional investors. Comparatively, 24.7% of SR Bancorp shares are owned by institutional investors. 3.7% of ACNB shares are owned by company insiders. Comparatively, 7.8% of SR Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

ACNB pays an annual dividend of $1.68 per share and has a dividend yield of 2.5%. SR Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. ACNB pays out 31.9% of its earnings in the form of a dividend. SR Bancorp pays out 53.3% 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. ACNB has increased its dividend for 8 consecutive years. ACNB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

ACNB beats SR Bancorp on 14 of the 17 factors compared between the two stocks.

About ACNB

ACNB Corporation, a financial holding company, offers banking, insurance, and financial services to individual, business, and government customers in the United States. The company provides checking, savings, and money market deposit accounts, as well as time deposits and debit cards. It also offers commercial lending products, such as commercial mortgages, real estate development and construction loans, accounts receivable and inventory financing, and agricultural and governmental loans; consumer lending products, including home equity loans and lines of credit, automobile and recreational vehicle loans, manufactured housing loans, and personal lines of credit; and mortgage lending programs include personal residential mortgages, and residential construction and investment mortgage loans. In addition, the company provides other services that are related to testamentary trusts, life insurance trusts, charitable remainder trusts, guardianships, powers of attorney, custodial accounts, and investment management and advisory accounts; and retail brokerage services. Further, it acts as a trustee to invest in, protect, manage, and distribute financial assets. Additionally, the company offers property and casualty, health, life, and disability insurance products to commercial and personal clients; and online, telephone, and mobile banking, as well as automated teller machine services. ACNB Corporation was founded in 1857 and is headquartered in Gettysburg, Pennsylvania.

About SR Bancorp

SR Bancorp, Inc. operates as the holding company for Somerset Regal Bank that provides customary retail and commercial banking services to individuals, businesses, and local municipalities in the communities of Somerset, Middlesex, Hunterdon, and Essex counties in New Jersey. It offers deposit instruments, including noninterest-bearing demand deposits, interest-bearing demand accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides loans comprising one- to four family-residential mortgage loans, home equity loans and lines of credit, unsecured personal loans, and rehabilitation loans; and bill payment services. In addition, it is involved in the investment activities. The company was founded in 1887 and is headquartered in Bound Brook, New Jersey.