1st Constitution Bancorp (NASDAQ: TBNK) and Territorial Bancorp (NASDAQ:TBNK) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.
This table compares 1st Constitution Bancorp and Territorial Bancorp’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|1st Constitution Bancorp||14.43%||9.71%||1.00%|
1st Constitution Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Territorial Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.9%. 1st Constitution Bancorp pays out 22.6% of its earnings in the form of a dividend. Territorial Bancorp pays out 49.4% 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. Territorial Bancorp has increased its dividend for 5 consecutive years. Territorial Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares 1st Constitution Bancorp and Territorial Bancorp’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|1st Constitution Bancorp||$49.90 million||3.77||$6.92 million||$1.06||21.18|
|Territorial Bancorp||$72.18 million||4.04||$14.96 million||$1.78||16.84|
Territorial Bancorp has higher revenue and earnings than 1st Constitution Bancorp. Territorial Bancorp is trading at a lower price-to-earnings ratio than 1st Constitution Bancorp, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and price targets for 1st Constitution Bancorp and Territorial Bancorp, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|1st Constitution Bancorp||0||1||0||0||2.00|
1st Constitution Bancorp presently has a consensus price target of $18.00, indicating a potential downside of 19.82%. Territorial Bancorp has a consensus price target of $32.00, indicating a potential upside of 6.77%. Given Territorial Bancorp’s higher possible upside, analysts clearly believe Territorial Bancorp is more favorable than 1st Constitution Bancorp.
Risk & Volatility
1st Constitution Bancorp has a beta of 0.37, indicating that its stock price is 63% less volatile than the S&P 500. Comparatively, Territorial Bancorp has a beta of 0.25, indicating that its stock price is 75% less volatile than the S&P 500.
Institutional & Insider Ownership
28.9% of 1st Constitution Bancorp shares are owned by institutional investors. Comparatively, 44.8% of Territorial Bancorp shares are owned by institutional investors. 14.6% of 1st Constitution Bancorp shares are owned by insiders. Comparatively, 11.7% of Territorial Bancorp shares are owned by 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.
Territorial Bancorp beats 1st Constitution Bancorp on 9 of the 15 factors compared between the two stocks.
About 1st Constitution Bancorp
1st Constitution Bancorp operates as the bank holding company for 1st Constitution Bank that provides commercial and retail banking services in the central and northeastern New Jersey areas. The company offers deposit products, including interest bearing demand deposits, such as interest-bearing checking accounts, money market accounts, and NOW accounts; and non-interest bearing demand, savings, and time deposits, as well as certificates of deposit. It also provides commercial loans, including term loans, lines of credit, and loans secured by equipment and receivables; secured and unsecured short-to-medium term commercial loans to businesses for working capital, business expansion, and the purchase of equipment and machinery; and construction loans to real estate developers for the acquisition, development, and construction of residential and commercial properties. In addition, the company offers residential first mortgage loans secured by owner-occupied property; construction loans; reverse mortgages; second mortgage home improvement loans; home equity lines of credit; and non-residential consumer loans for automobiles, recreation vehicles, and boats, as well as secured and unsecured personal loans, and deposit account secured loans. It serves corporations, individuals, partnerships, and other community organizations, as well as small businesses and not-for-profit organizations. As of December 31, 2017, the company operated through 17 branch offices, as well as 2 residential mortgage loan production offices in New Jersey. 1st Constitution Bancorp was founded in 1989 and is based in Cranbury, New Jersey.
About Territorial Bancorp
Territorial Bancorp Inc. operates as the holding company for Territorial Savings Bank that provides various financial services to individuals, families, and businesses. The company offers a range of deposit accounts, including passbook and statement savings accounts, certificates of deposit, money market accounts, commercial and regular checking accounts, and NOW accounts. It also provides various loan products comprising one- to four-family residential mortgage loans; home equity loans and lines of credit; construction, commercial, and other non-residential real estate loans; consumer loans; multi-family mortgage loans; commercial business loans; and other loans, as well as offers investment securities. In addition, the company, through its subsidiary, Territorial Financial Services, Inc. engages in insurance agency activities. Further, it provides various non-deposit investments, including annuities and mutual funds through a third-party broker-dealer. The company operates through a network of 29 full-service branches located in the State of Hawaii. Territorial Bancorp Inc. was founded in 1921 and is based in Honolulu, Hawaii.
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