Comparing SB Financial Group (NASDAQ:SBFG) & NB Bancorp (NASDAQ:NBBK)

NB Bancorp (NASDAQ:NBBK) and SB Financial Group (NASDAQ:SBFG) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Institutional and Insider Ownership

66.7% of SB Financial Group shares are held by institutional investors. 5.1% of NB Bancorp shares are held by insiders. Comparatively, 6.0% of SB Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for NB Bancorp and SB Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NB Bancorp	0	2	2	0	2.50
SB Financial Group	0	1	1	0	2.50

NB Bancorp presently has a consensus target price of $25.50, indicating a potential upside of 10.82%. Given NB Bancorp’s higher probable upside, analysts plainly believe NB Bancorp is more favorable than SB Financial Group.

Profitability

This table compares NB Bancorp and SB Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NB Bancorp	14.86%	9.75%	1.14%
SB Financial Group	17.17%	11.47%	1.04%

Dividends

NB Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. SB Financial Group pays an annual dividend of $0.64 per share and has a dividend yield of 2.1%. NB Bancorp pays out 16.9% of its earnings in the form of a dividend. SB Financial Group pays out 24.0% 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. SB Financial Group has raised its dividend for 12 consecutive years. SB Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares NB Bancorp and SB Financial Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NB Bancorp	$259.05 million	3.89	$50.30 million	$1.66	13.86
SB Financial Group	$91.03 million	2.09	$13.97 million	$2.67	11.39

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

Summary

NB Bancorp beats SB Financial Group on 8 of the 15 factors compared between the two stocks.

About NB Bancorp

NB Bancorp, Inc. focuses on operating as a bank holding company for Needham Bank that provides various banking products and services in Greater Boston metropolitan area and surrounding communities in Massachusetts, eastern Connecticut, southern New Hampshire, and Rhode Island. The company offers various deposits, including certificate of deposit, individual retirement, money market, savings, NOW, demand deposit, and interest-bearing and noninterest-bearing checking accounts; and commercial real estate and multifamily, one- to four-family residential real estate, construction and land development, commercial and industrial, and consumer loans, as well as home equity loans and lines of credit. It also invests in securities consisting of U.S. treasury and federal agency securities, government-sponsored residential mortgage-backed securities, municipal bonds, and corporate bonds. The company was founded in 1892 and is based in Needham, Massachusetts.

About SB Financial Group

SB Financial Group, Inc. operates as the financial holding company for the State Bank and Trust Company that provides a range of commercial banking and wealth management services to individual and corporate customers primarily in Ohio, Indiana, and Michigan. It offers checking, savings, money market accounts, as well as time certificates of deposit; and commercial, consumer, agricultural, and residential mortgage loans. The company also provides automatic teller machine, personal and corporate trust, commercial leasing, bank credit card, safe deposit box rental, internet banking, private client group, and other personalized banking products and services; and various trust and financial services comprising asset management services for individuals and corporate employee benefit plans, as well as brokerage services. In addition, it sells insurance products to retail and commercial customers. The company was formerly known as Rurban Financial Corp. and changed its name to SB Financial Group, Inc. in April 2013. SB Financial Group, Inc. was founded in 1902 and is based in Defiance, Ohio.