Pacific Continental (NASDAQ: PCBK) and 1st Constitution Bancorp (NASDAQ:FCCY) are both small-cap financials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitability, analyst recommendations, earnings and valuation.
Institutional & Insider Ownership
67.5% of Pacific Continental shares are held by institutional investors. Comparatively, 27.8% of 1st Constitution Bancorp shares are held by institutional investors. 4.8% of Pacific Continental shares are held by company insiders. Comparatively, 14.5% of 1st Constitution Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Pacific Continental pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. 1st Constitution Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.2%. Pacific Continental pays out 38.9% of its earnings in the form of a dividend. 1st Constitution Bancorp pays out 28.9% 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.
Valuation & Earnings
This table compares Pacific Continental and 1st Constitution Bancorp’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|1st Constitution Bancorp||$49.90 million||3.18||$6.93 million||$0.83||23.61|
1st Constitution Bancorp has higher revenue and earnings than Pacific Continental. 1st Constitution Bancorp is trading at a lower price-to-earnings ratio than Pacific Continental, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings for Pacific Continental and 1st Constitution Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|1st Constitution Bancorp||0||1||0||0||2.00|
Pacific Continental presently has a consensus target price of $28.00, indicating a potential upside of 0.00%. 1st Constitution Bancorp has a consensus target price of $18.00, indicating a potential downside of 8.16%. Given Pacific Continental’s higher possible upside, equities research analysts plainly believe Pacific Continental is more favorable than 1st Constitution Bancorp.
This table compares Pacific Continental and 1st Constitution Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|1st Constitution Bancorp||13.64%||8.09%||0.84%|
Volatility & Risk
Pacific Continental has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, 1st Constitution Bancorp has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.
Pacific Continental beats 1st Constitution Bancorp on 10 of the 14 factors compared between the two stocks.
Pacific Continental Company Profile
Pacific Continental Corporation is a bank holding company. The Company’s principal business activities are conducted through its subsidiary, Pacific Continental Bank (the Bank), an Oregon state-chartered bank with deposits insured by the Federal Deposit Insurance Corporation. The Bank operates in three primary markets: Eugene, Oregon, Portland; Oregon/Southwest Washington, and Seattle, Washington. As of December 31, 2016, the Bank operated 15 full-service offices in Oregon and Washington and two loan production offices in Washington and Colorado. The Bank primarily operates in large commercial markets and provides banking and related services designed for community-based businesses, nonprofit organizations, professional service providers and banking services for business owners. It provides traditional commercial and consumer banking services, including cash management products for businesses, online banking, safe deposit services debit and automated teller machine cards and others.
1st Constitution Bancorp Company Profile
1st Constitution Bancorp is the bank holding company for 1st Constitution Bank (the Bank). The Bank is a commercial bank, which is engaged in the business of commercial and retail banking. The Company operates through the Community Banking segment. The Community Banking segment consists of construction, commercial, retail and mortgage banking operations. As a community bank, the Bank offers a range of services (including demand, savings and time deposits and commercial and consumer/installment loans) to individuals, small businesses and not-for-profit organizations principally in the Fort Lee area of Bergen County and in Middlesex, Mercer, Somerset and Monmouth Counties of New Jersey. The Bank’s Mortgage Warehouse Funding Group offers revolving lines of credit that are available to licensed mortgage banking companies (the Warehouse Line of Credit). The Bank’s investment activities are classified as available for sale and held to maturity securities.
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