Provident Financial Services (NYSE:PFS – Get Free Report) and Capital Bancorp (NASDAQ:CBNK – Get Free Report) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.
Profitability
This table compares Provident Financial Services and Capital Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Provident Financial Services | 22.15% | 11.00% | 1.24% |
| Capital Bancorp | 17.47% | 13.14% | 1.46% |
Dividends
Provident Financial Services pays an annual dividend of $0.96 per share and has a dividend yield of 4.4%. Capital Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 1.4%. Provident Financial Services pays out 40.0% of its earnings in the form of a dividend. Capital Bancorp pays out 16.5% 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. Capital Bancorp has increased its dividend for 3 consecutive years.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Provident Financial Services | 0 | 2 | 4 | 1 | 2.86 |
| Capital Bancorp | 0 | 5 | 2 | 0 | 2.29 |
Provident Financial Services currently has a consensus price target of $26.79, indicating a potential upside of 21.89%. Capital Bancorp has a consensus price target of $39.67, indicating a potential upside of 2.00%. Given Provident Financial Services’ stronger consensus rating and higher probable upside, research analysts clearly believe Provident Financial Services is more favorable than Capital Bancorp.
Volatility and Risk
Provident Financial Services has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Capital Bancorp has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.
Valuation & Earnings
This table compares Provident Financial Services and Capital Bancorp”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Provident Financial Services | $1.38 billion | 2.07 | $291.16 million | $2.40 | 9.16 |
| Capital Bancorp | $310.06 million | 2.04 | $57.17 million | $3.40 | 11.44 |
Provident Financial Services has higher revenue and earnings than Capital Bancorp. Provident Financial Services is trading at a lower price-to-earnings ratio than Capital Bancorp, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
72.0% of Provident Financial Services shares are held by institutional investors. Comparatively, 56.1% of Capital Bancorp shares are held by institutional investors. 3.0% of Provident Financial Services shares are held by insiders. Comparatively, 33.5% of Capital Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
Provident Financial Services beats Capital Bancorp on 11 of the 18 factors compared between the two stocks.
About Provident Financial Services
Provident Financial Services, Inc. operates as the bank holding company for Provident Bank that provides various banking products and services to individuals, families, and businesses in the United States. Its deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA products. The company's loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, retail and industrial properties, and office buildings; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, personal loans and unsecured lines of credit, and auto and recreational vehicle loans. It also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, the company provides wealth management services comprising investment management, trust and estate administration, financial planning, and tax compliance and planning. Further, it sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.
About Capital Bancorp
Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.
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