TowneBank (NASDAQ:TOWN) and Cambridge Bancorp (NASDAQ:CATC) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitability and valuation.
Risk and Volatility
TowneBank has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Cambridge Bancorp has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500.
This table compares TowneBank and Cambridge Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and price targets for TowneBank and Cambridge Bancorp, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
TowneBank currently has a consensus target price of $32.50, suggesting a potential upside of 35.64%. Given TowneBank’s higher possible upside, research analysts clearly believe TowneBank is more favorable than Cambridge Bancorp.
Valuation & Earnings
This table compares TowneBank and Cambridge Bancorp’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|TowneBank||$613.42 million||2.81||$133.79 million||$1.98||12.10|
|Cambridge Bancorp||$102.04 million||3.27||$23.88 million||N/A||N/A|
TowneBank has higher revenue and earnings than Cambridge Bancorp.
Insider & Institutional Ownership
44.6% of TowneBank shares are owned by institutional investors. Comparatively, 37.3% of Cambridge Bancorp shares are owned by institutional investors. 3.3% of Cambridge Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
TowneBank pays an annual dividend of $0.64 per share and has a dividend yield of 2.7%. Cambridge Bancorp pays an annual dividend of $2.04 per share and has a dividend yield of 2.5%. TowneBank pays out 32.3% of its earnings in the form of a dividend. TowneBank has raised its dividend for 7 consecutive years. TowneBank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
TowneBank beats Cambridge Bancorp on 8 of the 14 factors compared between the two stocks.
TowneBank Company Profile
TowneBank provides retail and commercial banking services for small- and medium-size businesses, professionals, and individuals. The company operates in three segments: Banking, Realty, and Insurance. It accepts various deposits products, including demand deposits, negotiable order of withdrawal accounts, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate construction and acquisition loans. In addition, it provides other services, such as safe deposit boxes, cash management services, travelers' checks, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as Internet, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; asset management and commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options, such as alternative investments, annuities, margin accounts, convertible bonds, and pension and profit sharing plans. Additionally, it provides residential real estate, relocation, property management, vacations rental, and title and settlement services; and originates residential mortgage loans. The company offers life, property, casualty, and vehicle insurance services; travel, medical, and baggage protection insurance for travelers; and employee benefit programs, such as medical, dental, vision, and disability insurance. As of February 28, 2018, it operated 40 banking offices in Virginia and North Carolina. TowneBank was founded in 1998 and is based in Portsmouth, Virginia.
Cambridge Bancorp Company Profile
Cambridge Bancorp operates as the bank holding company for Cambridge Trust Company that provides commercial and consumer banking, and investment management and trust services. The company accepts various deposits, such as checking and savings accounts, certificates of deposit, money market accounts, individual retirement accounts, and time and demand deposits. Its loans products include residential and commercial real estate loans; home equity lines of credit and term loans; commercial and industrial loans; secured and unsecured loans, lines of credit, and personal installment loans; and construction loans. The company also offers cash management, online and mobile banking, and payments services. It serves commercial enterprises, non-profit organizations, and individuals. The company operates 10 Massachusetts locations in Cambridge, Boston, Belmont, Concord, Lexington, and Weston; and wealth management offices in Boston, Massachusetts, as well as in Concord, Manchester, and Portsmouth, New Hampshire. Cambridge Bancorp was founded in 1890 and is headquartered in Cambridge, Massachusetts.
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