VersaBank (NASDAQ:VBNK – Get Rating) and Peapack-Gladstone Financial (NASDAQ:PGC – Get Rating) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.
Analyst Recommendations
This is a breakdown of current ratings and target prices for VersaBank and Peapack-Gladstone Financial, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| VersaBank | 0 | 0 | 2 | 0 | 3.00 |
| Peapack-Gladstone Financial | 0 | 0 | 1 | 0 | 3.00 |
VersaBank presently has a consensus price target of $9.00, indicating a potential upside of 25.00%. Peapack-Gladstone Financial has a consensus price target of $44.50, indicating a potential upside of 32.88%. Given Peapack-Gladstone Financial’s higher possible upside, analysts clearly believe Peapack-Gladstone Financial is more favorable than VersaBank.
Risk and Volatility
Profitability
This table compares VersaBank and Peapack-Gladstone Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| VersaBank | 16.82% | 7.54% | 0.84% |
| Peapack-Gladstone Financial | 26.68% | 14.28% | 1.20% |
Earnings and Valuation
This table compares VersaBank and Peapack-Gladstone Financial’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| VersaBank | $102.93 million | 1.86 | $17.60 million | $0.71 | 10.14 |
| Peapack-Gladstone Financial | $278.29 million | 2.16 | $74.25 million | $4.00 | 8.37 |
Peapack-Gladstone Financial has higher revenue and earnings than VersaBank. Peapack-Gladstone Financial is trading at a lower price-to-earnings ratio than VersaBank, indicating that it is currently the more affordable of the two stocks.
Dividends
VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 1.0%. Peapack-Gladstone Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. VersaBank pays out 9.9% of its earnings in the form of a dividend. Peapack-Gladstone Financial pays out 5.0% 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.
Institutional & Insider Ownership
30.2% of VersaBank shares are owned by institutional investors. Comparatively, 73.0% of Peapack-Gladstone Financial shares are owned by institutional investors. 6.3% of Peapack-Gladstone Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Summary
Peapack-Gladstone Financial beats VersaBank on 12 of the 15 factors compared between the two stocks.
About VersaBank
VersaBank engages in the provision of financial services. It operates through Digital Banking and DRTC. The Digital Banking segment offers business to business model using its financial technoolgy to address issues in the US banking market. The DRTC segment refers to developed IT security software and capabilities. The company was founded by David Roy Taylor on January 18, 1993 and is headquartered in London, Canada.
About Peapack-Gladstone Financial
Peapack-Gladstone Financial Corp. is a bank holding company, which engages in the provision of private banking services to businesses, non-profits, and consumers. It operates through the following segments: Banking and Peapack Private. The Banking segment provides commercial, commercial real estate, multifamily, residential and consumer lending activities, deposit generation, operation of ATMs, telephone and internet banking services, merchant credit card services, and customer support and sales. The Peapack Private segment includes asset management services provided for individuals and institutions, personal trust services, including services as executor, trustee, administrator, custodian and guardian, corporate trust services including services as trustee for pension and profit-sharing plans, and other financial planning and advisory services. The company was founded in August 1997 and is headquartered in Bedminster, NJ.
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