Peapack-Gladstone Financial (NASDAQ:PGC) and Community Bancorp. (OTCMKTS:CMTV) Critical Analysis

Peapack-Gladstone Financial (NASDAQ:PGC) and Community Bancorp. (OTCMKTS:CMTV) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Dividends

Peapack-Gladstone Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. Community Bancorp. pays an annual dividend of $0.96 per share and has a dividend yield of 4.3%. Peapack-Gladstone Financial pays out 10.9% of its earnings in the form of a dividend. Community Bancorp. pays out 36.6% 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.

Earnings and Valuation

This table compares Peapack-Gladstone Financial and Community Bancorp.”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peapack-Gladstone Financial	$406.92 million	1.22	$32.99 million	$1.83	15.38
Community Bancorp.	$62.18 million	2.03	$12.76 million	$2.62	8.59

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for Peapack-Gladstone Financial and Community Bancorp., as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peapack-Gladstone Financial	0	0	2	1	3.33
Community Bancorp.	0	0	0	0	0.00

Peapack-Gladstone Financial presently has a consensus price target of $36.33, suggesting a potential upside of 29.12%. Given Peapack-Gladstone Financial’s stronger consensus rating and higher possible upside, research analysts clearly believe Peapack-Gladstone Financial is more favorable than Community Bancorp..

Profitability

This table compares Peapack-Gladstone Financial and Community Bancorp.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peapack-Gladstone Financial	7.62%	5.25%	0.46%
Community Bancorp.	22.51%	14.81%	1.24%

Volatility and Risk

Peapack-Gladstone Financial has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Community Bancorp. has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500.

Institutional and Insider Ownership

72.8% of Peapack-Gladstone Financial shares are held by institutional investors. 7.0% of Peapack-Gladstone Financial shares are held by insiders. Comparatively, 9.3% of Community Bancorp. shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Peapack-Gladstone Financial beats Community Bancorp. on 10 of the 17 factors compared between the two stocks.

About Peapack-Gladstone Financial

Peapack-Gladstone Financial Corporation operates as the bank holding company for Peapack-Gladstone Bank that provides private banking and wealth management services in the United States. The company operates in two segments, Banking and Peapack Private. It offers checking and savings accounts, money market and interest-bearing checking accounts, certificates of deposit, and individual retirement accounts. The company also provides working capital lines of credit, term loans for fixed asset acquisitions, commercial mortgages, multi-family mortgages, and other forms of asset-based financing services; and residential mortgages, home equity lines of credit, and other second mortgage loans. In addition, it offers corporate and industrial (C&I) and equipment finance, commercial real estate, multifamily, residential, and consumer lending activities; treasury management services; C&I advisory services; escrow management; deposit generation; investment management services; personal trust services, including services as executor, trustee, administrator, custodian, and guardian; and other financial planning, tax preparation, and advisory services. Further, the company provides telephone and Internet banking, merchant credit card, and customer support sales services. Its private banking clients include businesses, non-profits, and consumers; wealth management clients comprise individuals, families, foundations, endowments, trusts, and estates; and commercial loan clients include business owners, professionals, retailers, contractors, and real estate investors. The company operates its private banking locations in Bedminster, Morristown, Princeton, and Teaneck, New Jersey; and branches in Somerset, Morris, Hunterdon, and Union counties, as well as operates automated teller machines. Peapack-Gladstone Financial Corporation was founded in 1921 and is headquartered in Bedminster, New Jersey.

About Community Bancorp.

Community Bancorp. operates as the bank holding company for Community National Bank that provides financial services to individuals, businesses, nonprofit organizations, and municipalities in northern and central Vermont. It offers financing for commercial business properties, equipment, inventories, and accounts receivable, as well as standby letters of credit; and business checking and other deposit accounts, cash management services, repurchase agreements, ACH and wire transfer services, card processing, and remote deposit capture. The company also provides commercial real estate lending products, including financing for commercial developers and investors, residential builders and developers, and community development entities, including credit products to facilitate the purchase of land and/or build structures for business; to develop residential or commercial properties; and for real estate secured financing of existing businesses, as well as financing to startups and other small businesses. In addition, it offers residential real estate lending products, including fixed-rate and adjustable rate residential mortgage and home equity loans; and retail credit services, which includes personal, automobile, and boat/recreational vehicle loans. The company also provides municipal and institutional banking services, such as deposit account services, term and tax-exempt loans, and lines of credit to state and local governments, schools, charities, membership, and not-for-profit associations. Further, it offers consumer banking services, including checking accounts, savings programs, ATMs, debit and credit cards, night deposit facilities, and online, mobile and telephone banking services. Community Bancorp. was founded in 1851 and is headquartered in Derby, Vermont.