Critical Contrast: South Atlantic Bancshares (OTCMKTS:SABK) and Bank of the James Financial Group (NASDAQ:BOTJ)

South Atlantic Bancshares (OTCMKTS:SABK) and Bank of the James Financial Group (NASDAQ:BOTJ) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.

Institutional & Insider Ownership

13.3% of South Atlantic Bancshares shares are held by institutional investors. Comparatively, 18.5% of Bank of the James Financial Group shares are held by institutional investors. 11.9% of Bank of the James Financial Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

South Atlantic Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Bank of the James Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. South Atlantic Bancshares pays out 4.4% of its earnings in the form of a dividend. Bank of the James Financial Group pays out 16.5% 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. Bank of the James Financial Group has increased its dividend for 5 consecutive years. Bank of the James Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares South Atlantic Bancshares and Bank of the James Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Atlantic Bancshares	N/A	N/A	N/A
Bank of the James Financial Group	17.17%	14.37%	1.07%

Valuation & Earnings

This table compares South Atlantic Bancshares and Bank of the James Financial Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Atlantic Bancshares	$102.25 million	1.77	$17.08 million	$2.25	10.62
Bank of the James Financial Group	$62.51 million	1.70	$9.02 million	$2.42	9.67

South Atlantic Bancshares has higher revenue and earnings than Bank of the James Financial Group. Bank of the James Financial Group is trading at a lower price-to-earnings ratio than South Atlantic Bancshares, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

South Atlantic Bancshares has a beta of 0.1, meaning that its stock price is 90% less volatile than the S&P 500. Comparatively, Bank of the James Financial Group has a beta of 0.18, meaning that its stock price is 82% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for South Atlantic Bancshares and Bank of the James Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Atlantic Bancshares	0	1	0	0	2.00
Bank of the James Financial Group	0	1	0	0	2.00

Summary

Bank of the James Financial Group beats South Atlantic Bancshares on 9 of the 14 factors compared between the two stocks.

About South Atlantic Bancshares

South Atlantic Bancshares, Inc. operates as the bank holding company for South Atlantic Bank that provides consumer and commercial banking products and services to individuals, small businesses, and corporations in South Carolina. The company offers checking, money market, and saving accounts, as well as certificate of deposit, individual retirement, and health saving accounts; personal, auto, and recreation loans, as well as home equity and ready reserve overdraft line of credits, and commercial lending products; and credit cards. It also provides cash management and merchant card services; remote deposit capture and automated clearing house services; online, mobile, and telephone banking services; personal and business checks; mortgage products and services; and wealth management services. The company operates offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, and Beaufort, South Carolina. South Atlantic Bancshares, Inc. was founded in 2007 and is headquartered in Myrtle Beach, South Carolina.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also provides loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it offers other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company provides mortgage banking; investment advisory services; securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1999 and is headquartered in Lynchburg, Virginia.