Peoples Financial (OTCMKTS:PFBX) and First Business Financial Services (NASDAQ:FBIZ) Head to Head Contrast

First Business Financial Services (NASDAQ:FBIZ) and Peoples Financial (OTCMKTS:PFBX) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.

Volatility & Risk

First Business Financial Services has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Peoples Financial has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for First Business Financial Services and Peoples Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Business Financial Services	0	0	4	0	3.00
Peoples Financial	0	0	0	0	0.00

First Business Financial Services presently has a consensus target price of $57.25, suggesting a potential upside of 17.03%. Given First Business Financial Services’ stronger consensus rating and higher probable upside, research analysts clearly believe First Business Financial Services is more favorable than Peoples Financial.

Profitability

This table compares First Business Financial Services and Peoples Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Business Financial Services	16.86%	14.33%	1.16%
Peoples Financial	54.68%	26.99%	2.51%

Dividends

First Business Financial Services pays an annual dividend of $1.16 per share and has a dividend yield of 2.4%. Peoples Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.8%. First Business Financial Services pays out 21.1% of its earnings in the form of a dividend. Peoples Financial pays out 8.1% 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. First Business Financial Services has raised its dividend for 13 consecutive years. First Business Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

60.1% of First Business Financial Services shares are held by institutional investors. Comparatively, 32.8% of Peoples Financial shares are held by institutional investors. 5.1% of First Business Financial Services shares are held by company insiders. Comparatively, 28.1% of Peoples Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares First Business Financial Services and Peoples Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Business Financial Services	$158.03 million	2.58	$44.24 million	$5.50	8.89
Peoples Financial	$39.52 million	2.29	$21.70 million	$4.42	4.43

First Business Financial Services has higher revenue and earnings than Peoples Financial. Peoples Financial is trading at a lower price-to-earnings ratio than First Business Financial Services, indicating that it is currently the more affordable of the two stocks.

Summary

First Business Financial Services beats Peoples Financial on 12 of the 17 factors compared between the two stocks.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.

About Peoples Financial

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. The company accepts various deposits, such as interest and non-interest-bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). It offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, the company provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, it offers other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and Internet banking services. the company provides services to customers of various industries, such as seafood, retail, hospitality, hotel/motel, gaming, and construction. Peoples Financial Corporation was founded in 1896 and is headquartered in Biloxi, Mississippi.