Critical Review: Parke Bancorp (NASDAQ:PKBK) and National Bankshares (NASDAQ:NKSH)

National Bankshares (NASDAQ:NKSH) and Parke Bancorp (NASDAQ:PKBK) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, risk, profitability, valuation and dividends.

Analyst Ratings

This is a summary of recent recommendations and price targets for National Bankshares and Parke Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bankshares	0	0	1	1	3.50
Parke Bancorp	0	0	1	0	3.00

Insider & Institutional Ownership

29.7% of National Bankshares shares are owned by institutional investors. Comparatively, 49.7% of Parke Bancorp shares are owned by institutional investors. 3.3% of National Bankshares shares are owned by company insiders. Comparatively, 13.0% of Parke Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares National Bankshares and Parke Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bankshares	$85.32 million	3.23	$15.83 million	$3.18	13.62
Parke Bancorp	$146.08 million	2.80	$37.78 million	$3.84	9.05

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

Profitability

This table compares National Bankshares and Parke Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bankshares	23.22%	10.66%	1.09%
Parke Bancorp	29.99%	13.88%	2.05%

Dividends

National Bankshares pays an annual dividend of $1.50 per share and has a dividend yield of 3.5%. Parke Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.3%. National Bankshares pays out 47.2% of its earnings in the form of a dividend. Parke Bancorp pays out 20.8% 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.

Volatility & Risk

National Bankshares has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, Parke Bancorp has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Summary

Parke Bancorp beats National Bankshares on 9 of the 15 factors compared between the two stocks.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.

About Parke Bancorp

Parke Bancorp, Inc. operates as the bank holding company for Parke Bank that provides personal and business financial services to individuals and small to mid-sized businesses. The company offers various deposit products, including checking, savings, time, money market, and individual retirement accounts, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, construction, commercial and residential real estate mortgage, and consumer loans. In addition, the company provides debit cards, internet banking, and online bill payment services. Parke Bancorp, Inc. was founded in 1999 and is headquartered in Washington Township, New Jersey.