PCB Bancorp (NASDAQ:PCB – Get Free Report) and Merchants Bancorp (NASDAQ:MBIN – Get Free Report) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.
Analyst Ratings
This is a summary of current ratings and target prices for PCB Bancorp and Merchants Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PCB Bancorp | 0 | 3 | 0 | 1 | 2.50 |
| Merchants Bancorp | 0 | 3 | 2 | 0 | 2.40 |
PCB Bancorp currently has a consensus price target of $27.75, indicating a potential downside of 1.08%. Merchants Bancorp has a consensus price target of $55.25, indicating a potential upside of 14.53%. Given Merchants Bancorp’s higher probable upside, analysts clearly believe Merchants Bancorp is more favorable than PCB Bancorp.
Volatility & Risk
PCB Bancorp has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Merchants Bancorp has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.
Dividends
PCB Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 3.1%. Merchants Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 0.9%. PCB Bancorp pays out 30.4% of its earnings in the form of a dividend. Merchants Bancorp pays out 8.8% 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. PCB Bancorp has increased its dividend for 7 consecutive years and Merchants Bancorp has increased its dividend for 8 consecutive years.
Profitability
This table compares PCB Bancorp and Merchants Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PCB Bancorp | 19.65% | 12.91% | 1.24% |
| Merchants Bancorp | 19.80% | 15.29% | 1.34% |
Institutional and Insider Ownership
33.0% of PCB Bancorp shares are owned by institutional investors. Comparatively, 24.6% of Merchants Bancorp shares are owned by institutional investors. 27.0% of PCB Bancorp shares are owned by insiders. Comparatively, 44.9% of Merchants Bancorp shares are owned 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.
Earnings & Valuation
This table compares PCB Bancorp and Merchants Bancorp”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PCB Bancorp | $209.37 million | 1.88 | $37.45 million | $2.89 | 9.71 |
| Merchants Bancorp | $1.37 billion | 1.62 | $218.77 million | $4.98 | 9.69 |
Merchants Bancorp has higher revenue and earnings than PCB Bancorp. Merchants Bancorp is trading at a lower price-to-earnings ratio than PCB Bancorp, indicating that it is currently the more affordable of the two stocks.
Summary
Merchants Bancorp beats PCB Bancorp on 12 of the 18 factors compared between the two stocks.
About PCB Bancorp
PCB Bancorp operates as the bank holding company for PCB Bank that provides various banking products and services to small to medium-sized businesses, individuals, and professionals in Southern California. The company offers demand, savings, money market, and time deposits, as well as certificates of deposit; and trade finance, remote deposit capture, courier deposit services, positive pay services, zero balance accounts, and sweep accounts. It also provides real estate loans, including commercial and residential, Small Business Administration (SBA) property, and construction loans; commercial and industrial loans, such as commercial term and lines of credit, SBA commercial term, and SBA Paycheck Protection Program loans; and consumer loans comprising residential mortgage; and automobile loans, unsecured lines of credit, and term loans. In addition, the company offers access to account balances, online transfers, and online bill payment and electronic delivery of customer statements; and mobile banking solutions that include remote check deposit and mobile bill pay. Further, it provides automated teller machines; and banking by telephone, mail, personal appointment, debit cards, direct deposit, and cashier's checks, as well as treasury management, wire transfer, and automated clearing house services. The company operates through a network of full-service branches in Los Angeles and Orange counties, California; Carrollton and Dallas, Texas; and Englewood Cliffs and Palisade Park, New Jersey, and Bayside, New York. It also operates loan production offices in Los Angeles and Orange Counties, California; Annandale, Virginia; Atlanta, Georgia; Bellevue, Washington; Aurora, Colorado; and Carrollton, Texas. The company was formerly known as Pacific City Financial Corporation and changed its name to PCB Bancorp in July 2019. PCB Bancorp was founded in 2003 and is headquartered in Los Angeles, California.
About Merchants Bancorp
Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.
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