Financial Analysis: KBC Group (OTCMKTS:KBCSY) & Capital Bancorp (NASDAQ:CBNK)

KBC Group (OTCMKTS:KBCSY) and Capital Bancorp (NASDAQ:CBNK) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Insider and Institutional Ownership

56.1% of Capital Bancorp shares are held by institutional investors. 33.5% of Capital Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares KBC Group and Capital Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KBC Group	$26.56 billion	2.12	$4.04 billion	$5.26	12.84
Capital Bancorp	$310.06 million	2.03	$57.17 million	$3.40	11.35

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

Risk and Volatility

KBC Group has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Capital Bancorp has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Dividends

KBC Group pays an annual dividend of $0.66 per share and has a dividend yield of 1.0%. Capital Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 1.5%. KBC Group pays out 12.5% of its earnings in the form of a dividend. Capital Bancorp 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. Capital Bancorp has increased its dividend for 3 consecutive years. Capital Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares KBC Group and Capital Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KBC Group	15.58%	13.42%	0.94%
Capital Bancorp	17.47%	13.14%	1.46%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for KBC Group and Capital Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KBC Group	1	4	2	0	2.14
Capital Bancorp	0	5	2	0	2.29

Capital Bancorp has a consensus target price of $39.67, indicating a potential upside of 2.76%. Given Capital Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Capital Bancorp is more favorable than KBC Group.

About KBC Group

KBC Group NV, together with its subsidiaries, provides integrated bank-insurance services primarily for retail, private banking, small and medium sized enterprises, and mid-cap clients. The company offers demand deposits and savings accounts; home and mortgage loans; consumer finance and SME funding services; credit, investment fund and asset management, and life and non-life insurance; and cash management, payments, trade finance, lease, money market, capital market products, and stockbroking services. It also provides digital and mobile banking services. The company was formerly known as KBC Bank and Insurance Holding Company NV and changed its name to KBC Group NV in March 2005. KBC Group NV was incorporated in 1935 and is headquartered in Brussels, Belgium.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.