Critical Contrast: Fidelity D&D Bancorp (NASDAQ:FDBC) versus LINKBANCORP (NASDAQ:LNKB)

LINKBANCORP (NASDAQ:LNKB) and Fidelity D&D Bancorp (NASDAQ:FDBC) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Institutional and Insider Ownership

37.5% of LINKBANCORP shares are held by institutional investors. Comparatively, 20.1% of Fidelity D&D Bancorp shares are held by institutional investors. 37.5% of LINKBANCORP shares are held by insiders. Comparatively, 21.0% of Fidelity D&D Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

LINKBANCORP has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500. Comparatively, Fidelity D&D Bancorp has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500.

Earnings & Valuation

This table compares LINKBANCORP and Fidelity D&D Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LINKBANCORP	$186.50 million	1.70	$33.51 million	$0.90	9.42
Fidelity D&D Bancorp	$140.40 million	1.79	$28.20 million	$4.87	8.94

LINKBANCORP has higher revenue and earnings than Fidelity D&D Bancorp. Fidelity D&D Bancorp is trading at a lower price-to-earnings ratio than LINKBANCORP, indicating that it is currently the more affordable of the two stocks.

Dividends

LINKBANCORP pays an annual dividend of $0.30 per share and has a dividend yield of 3.5%. Fidelity D&D Bancorp pays an annual dividend of $1.72 per share and has a dividend yield of 3.9%. LINKBANCORP pays out 33.3% of its earnings in the form of a dividend. Fidelity D&D Bancorp pays out 35.3% 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. Fidelity D&D Bancorp has increased its dividend for 10 consecutive years. Fidelity D&D Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for LINKBANCORP and Fidelity D&D Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LINKBANCORP	0	3	1	0	2.25
Fidelity D&D Bancorp	0	1	0	0	2.00

LINKBANCORP currently has a consensus price target of $9.63, indicating a potential upside of 13.50%. Given LINKBANCORP’s stronger consensus rating and higher possible upside, equities analysts plainly believe LINKBANCORP is more favorable than Fidelity D&D Bancorp.

Profitability

This table compares LINKBANCORP and Fidelity D&D Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LINKBANCORP	17.97%	8.85%	0.90%
Fidelity D&D Bancorp	20.08%	12.84%	1.04%

Summary

LINKBANCORP beats Fidelity D&D Bancorp on 9 of the 17 factors compared between the two stocks.

About LINKBANCORP

LINKBANCORP, Inc. operates as a bank holding company for The Gratz Bank, that provides various banking products and services to individuals, families, nonprofit, and business customers in Pennsylvania. Its deposit products include demand, saving, and money market accounts, as well as certificates of deposits. The company also offers commercial real estate, commercial business, commercial real estate construction, land development, residential real estate, home equity, consumer, agricultural, and municipal loans. It also provides online banking, mobile banking, direct and remote deposit, and cash management services. The company was incorporated in 2018 and is headquartered in Camp Hill, Pennsylvania.

About Fidelity D&D Bancorp

Fidelity D&D Bancorp, Inc. is a holding company, which engages in the provision of commercial banking services. It operates through the following segments: Commercial and Industrial, Commercial Real Estate, Consumer, and Residential Real Estate. The Commercial and Industrial segment refers to identified historic and/or the projected cash flows of the borrower and secondarily to the underlying collateral provided by the borrower. The Commercial Real Estate segment offers finances purchase of real estate, refinance existing obligations, and/or to provide capital. The Consumer segment includes home equity installment loans and lines of credit. The Residential Real Estate segment operates as a secured first lien position of the borrower’s residential real estate. The company was founded in 1902 and is headquartered in Dunmore, PA.