Lake Shore Bancorp (NASDAQ:LSBK – Get Free Report) and Dime Community Bancshares (NASDAQ:DCOM – Get Free Report) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, institutional ownership, earnings, risk and profitability.
Insider & Institutional Ownership
8.7% of Lake Shore Bancorp shares are held by institutional investors. Comparatively, 75.3% of Dime Community Bancshares shares are held by institutional investors. 8.4% of Lake Shore Bancorp shares are held by company insiders. Comparatively, 7.4% of Dime Community Bancshares shares are held by company 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.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Lake Shore Bancorp and Dime Community Bancshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lake Shore Bancorp | 0 | 0 | 0 | 1 | 4.00 |
| Dime Community Bancshares | 0 | 2 | 4 | 0 | 2.67 |
Dime Community Bancshares has a consensus target price of $45.50, indicating a potential upside of 7.56%. Given Dime Community Bancshares’ higher probable upside, analysts clearly believe Dime Community Bancshares is more favorable than Lake Shore Bancorp.
Profitability
This table compares Lake Shore Bancorp and Dime Community Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lake Shore Bancorp | 20.62% | 5.84% | 1.15% |
| Dime Community Bancshares | 15.15% | 9.12% | 0.83% |
Dividends
Lake Shore Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 1.9%. Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. Lake Shore Bancorp pays out 32.1% of its earnings in the form of a dividend. Dime Community Bancshares pays out 32.5% 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. Dime Community Bancshares has increased its dividend for 2 consecutive years. Dime Community Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Lake Shore Bancorp has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, Dime Community Bancshares has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.
Earnings & Valuation
This table compares Lake Shore Bancorp and Dime Community Bancshares”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lake Shore Bancorp | $30.24 million | 4.94 | $7.27 million | $1.12 | 16.98 |
| Dime Community Bancshares | $489.44 million | 3.82 | $110.68 million | $3.08 | 13.73 |
Dime Community Bancshares has higher revenue and earnings than Lake Shore Bancorp. Dime Community Bancshares is trading at a lower price-to-earnings ratio than Lake Shore Bancorp, indicating that it is currently the more affordable of the two stocks.
Summary
Dime Community Bancshares beats Lake Shore Bancorp on 11 of the 18 factors compared between the two stocks.
About Lake Shore Bancorp
Lake Shore Bancorp, Inc. operates as a savings and loan holding company for Lake Shore Servings Bank. It offers personal services such as checking, savings, lending, banking, debit card, e-services, and online banking; and business services including deposit products, commercial loans, and business e-statements. The company was founded in 2006 and is headquartered in Dunkirk, NY.
About Dime Community Bancshares
Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.
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