Reviewing First Business Financial Services (NASDAQ:FBIZ) & Fvcbankcorp (NASDAQ:FVCB)

First Business Financial Services (NASDAQ:FBIZ) and Fvcbankcorp (NASDAQ:FVCB) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, institutional ownership, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for First Business Financial Services and Fvcbankcorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Business Financial Services	0	0	4	1	3.20
Fvcbankcorp	0	0	2	0	3.00

First Business Financial Services currently has a consensus price target of $78.25, indicating a potential upside of 7.93%. Fvcbankcorp has a consensus price target of $21.00, indicating a potential upside of 15.77%. Given Fvcbankcorp’s higher probable upside, analysts plainly believe Fvcbankcorp is more favorable than First Business Financial Services.

Dividends

First Business Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. Fvcbankcorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. First Business Financial Services pays out 20.7% of its earnings in the form of a dividend. Fvcbankcorp pays out 19.7% 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. First Business Financial Services has increased its dividend for 13 consecutive years. First Business Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

First Business Financial Services has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Fvcbankcorp has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500.

Insider and Institutional Ownership

60.1% of First Business Financial Services shares are owned by institutional investors. Comparatively, 43.6% of Fvcbankcorp shares are owned by institutional investors. 5.0% of First Business Financial Services shares are owned by company insiders. Comparatively, 11.2% of Fvcbankcorp shares are owned 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.

Valuation and Earnings

This table compares First Business Financial Services and Fvcbankcorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Business Financial Services	$279.25 million	2.17	$50.32 million	$6.56	11.05
Fvcbankcorp	$122.03 million	2.68	$22.06 million	$1.42	12.77

First Business Financial Services has higher revenue and earnings than Fvcbankcorp. First Business Financial Services is trading at a lower price-to-earnings ratio than Fvcbankcorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First Business Financial Services and Fvcbankcorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Business Financial Services	19.28%	14.92%	1.29%
Fvcbankcorp	20.45%	9.80%	1.08%

Summary

First Business Financial Services beats Fvcbankcorp on 12 of the 18 factors compared between the two stocks.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.

About Fvcbankcorp

FVCBankcorp, Inc. operates as the bank holding company for FVCbank that provides various banking products and services in Virginia. It offers deposit products, including interest and noninterest-bearing transaction accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides commercial real estate loans; commercial construction loans; commercial loans for various business purposes, such as for working capital, equipment purchases, lines of credit, and government contract financing; small business administration loans; asset-based loans and accounts receivable financing; home equity loans; and consumer loans. In addition, it offers business and consumer credit cards; merchant services; business insurance products; and online banking, remote deposit, and mobile banking services. The company serves commercial businesses, nonprofit organizations, professional service entities, and their respective owners and employees located in the greater Washington, D.C., and Baltimore metropolitan areas. It operates branch offices in Arlington, Virginia; the independent city of Manassas, Virginia; Reston, Fairfax County, Virginia; Springfield, Fairfax County in Virginia; and Montgomery County and Baltimore in Maryland, and Washington, D.C. FVCBankcorp, Inc. was founded in 2007 and is headquartered in Fairfax, Virginia.