SB Financial Group (NASDAQ:SBFG – Get Free Report) and NB Bancorp (NASDAQ:NBBK – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, valuation, profitability and risk.
Profitability
This table compares SB Financial Group and NB Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| SB Financial Group | 17.67% | 11.82% | 1.07% |
| NB Bancorp | 14.86% | 9.75% | 1.14% |
Dividends
SB Financial Group pays an annual dividend of $0.64 per share and has a dividend yield of 2.1%. NB Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. SB Financial Group pays out 23.9% of its earnings in the form of a dividend. NB Bancorp pays out 16.9% 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. SB Financial Group has increased its dividend for 12 consecutive years. SB Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a breakdown of recent ratings and price targets for SB Financial Group and NB Bancorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| SB Financial Group | 0 | 1 | 1 | 0 | 2.50 |
| NB Bancorp | 0 | 2 | 2 | 0 | 2.50 |
NB Bancorp has a consensus price target of $25.50, indicating a potential upside of 12.53%. Given NB Bancorp’s higher possible upside, analysts clearly believe NB Bancorp is more favorable than SB Financial Group.
Earnings and Valuation
This table compares SB Financial Group and NB Bancorp”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| SB Financial Group | $68.36 million | 2.74 | $13.97 million | $2.68 | 11.16 |
| NB Bancorp | $351.74 million | 2.82 | $50.30 million | $1.66 | 13.65 |
NB Bancorp has higher revenue and earnings than SB Financial Group. SB Financial Group is trading at a lower price-to-earnings ratio than NB Bancorp, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
66.7% of SB Financial Group shares are held by institutional investors. 5.9% of SB Financial Group shares are held by company insiders. Comparatively, 5.1% of NB Bancorp shares are held by company 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
NB Bancorp beats SB Financial Group on 8 of the 15 factors compared between the two stocks.
About SB Financial Group
SB Financial Group, Inc. operates as the financial holding company for the State Bank and Trust Company that provides a range of commercial banking and wealth management services to individual and corporate customers primarily in Ohio, Indiana, and Michigan. It offers checking, savings, money market accounts, as well as time certificates of deposit; and commercial, consumer, agricultural, and residential mortgage loans. The company also provides automatic teller machine, personal and corporate trust, commercial leasing, bank credit card, safe deposit box rental, internet banking, private client group, and other personalized banking products and services; and various trust and financial services comprising asset management services for individuals and corporate employee benefit plans, as well as brokerage services. In addition, it sells insurance products to retail and commercial customers. The company was formerly known as Rurban Financial Corp. and changed its name to SB Financial Group, Inc. in April 2013. SB Financial Group, Inc. was founded in 1902 and is based in Defiance, Ohio.
About NB Bancorp
NB Bancorp, Inc. focuses on operating as a bank holding company for Needham Bank that provides various banking products and services in Greater Boston metropolitan area and surrounding communities in Massachusetts, eastern Connecticut, southern New Hampshire, and Rhode Island. The company offers various deposits, including certificate of deposit, individual retirement, money market, savings, NOW, demand deposit, and interest-bearing and noninterest-bearing checking accounts; and commercial real estate and multifamily, one- to four-family residential real estate, construction and land development, commercial and industrial, and consumer loans, as well as home equity loans and lines of credit. It also invests in securities consisting of U.S. treasury and federal agency securities, government-sponsored residential mortgage-backed securities, municipal bonds, and corporate bonds. The company was founded in 1892 and is based in Needham, Massachusetts.
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