FS Bancorp (NASDAQ:FSBW – Get Free Report) and Pacific Alliance Bank (OTCMKTS:PFBN – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.
Analyst Recommendations
This is a breakdown of current recommendations for FS Bancorp and Pacific Alliance Bank, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| FS Bancorp | 1 | 2 | 1 | 0 | 2.00 |
| Pacific Alliance Bank | 0 | 0 | 0 | 0 | 0.00 |
FS Bancorp presently has a consensus price target of $45.00, suggesting a potential upside of 3.50%. Given FS Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe FS Bancorp is more favorable than Pacific Alliance Bank.
Risk & Volatility
Insider & Institutional Ownership
63.9% of FS Bancorp shares are held by institutional investors. 12.9% of FS Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Dividends
FS Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.7%. Pacific Alliance Bank pays an annual dividend of $0.10 per share and has a dividend yield of 1.1%. FS Bancorp pays out 26.7% of its earnings in the form of a dividend. FS Bancorp has increased its dividend for 12 consecutive years. FS Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares FS Bancorp and Pacific Alliance Bank”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| FS Bancorp | $219.52 million | 1.47 | $33.35 million | $4.34 | 10.02 |
| Pacific Alliance Bank | $26.40 million | 1.14 | $2.30 million | N/A | N/A |
FS Bancorp has higher revenue and earnings than Pacific Alliance Bank.
Profitability
This table compares FS Bancorp and Pacific Alliance Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| FS Bancorp | 14.88% | 10.86% | 1.05% |
| Pacific Alliance Bank | N/A | N/A | N/A |
Summary
FS Bancorp beats Pacific Alliance Bank on 14 of the 15 factors compared between the two stocks.
About FS Bancorp
FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.
About Pacific Alliance Bank
Pacific Alliance Bank provides commercial and consumer banking products and services for small to midsize business owners, and employees in the United States. It offers checking, money market, savings, and individual retirement accounts; and certificates of deposit. The company also provides mortgage, commercial, term, commercial real estate, construction, and SBA loans; and lines of credit. In addition, it offers personal and business online services; and casher checks, check reorder, night deposit, direct deposit, safe deposit boxes, positive pay/check reconciliation, wire, debit card, and other services. The company was founded in 2006 and is headquartered in San Gabriel, California.
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