Financial Analysis: Princeton Bancorp (NASDAQ:BPRN) versus QNB (OTCMKTS:QNBC)

Princeton Bancorp (NASDAQ:BPRN) and QNB (OTCMKTS:QNBC) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Analyst Recommendations

This is a summary of current recommendations and price targets for Princeton Bancorp and QNB, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Princeton Bancorp	0	1	1	1	3.00
QNB	0	0	0	0	0.00

Princeton Bancorp currently has a consensus price target of $35.00, indicating a potential downside of 3.39%. Given Princeton Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Princeton Bancorp is more favorable than QNB.

Valuation & Earnings

This table compares Princeton Bancorp and QNB”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Princeton Bancorp	$139.02 million	1.76	$18.39 million	$2.72	13.32
QNB	$99.60 million	1.41	$14.09 million	$3.77	9.95

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

Profitability

This table compares Princeton Bancorp and QNB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Princeton Bancorp	N/A	N/A	N/A
QNB	14.15%	13.20%	0.80%

Risk and Volatility

Princeton Bancorp has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, QNB has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Insider & Institutional Ownership

43.4% of Princeton Bancorp shares are held by institutional investors. Comparatively, 0.7% of QNB shares are held by institutional investors. 21.9% of Princeton Bancorp shares are held by company insiders. Comparatively, 14.5% of QNB shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Princeton Bancorp pays an annual dividend of $1.40 per share and has a dividend yield of 3.9%. QNB pays an annual dividend of $1.52 per share and has a dividend yield of 4.1%. Princeton Bancorp pays out 51.5% of its earnings in the form of a dividend. QNB pays out 40.3% 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. QNB is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Princeton Bancorp beats QNB on 11 of the 17 factors compared between the two stocks.

About Princeton Bancorp

Princeton Bancorp, Inc. operates as the bank holding company for The Bank of Princeton that provides various banking products and services. It accepts various deposit products, including checking, savings, attorney trust, and money market accounts, as well as certificates of deposit. The company also offers traditional retail banking services, one-to-four-family residential mortgage loans, multi-family and commercial mortgage loans, construction loans, and commercial business loans, as well as consumer loans, including home equity loans and lines of credit. In addition, it provides debit and credit cards, and money orders, direct deposit, automated teller machines, cashier's checks, safe deposit boxes, online banking, wire transfers, night depository, remote deposit capture, bank-by-mail, online, and automated telephone banking services, as well as payroll-related services and merchant credit card processing services. Further, the company offers full on-line statements, on-line bill payment, account inquiries, mobile banking, transaction histories and details, and account-to-account transfer services. Princeton Bancorp, Inc. was founded in 2007 and is headquartered in Princeton, New Jersey.

About QNB

QNB Corp. operates as the bank holding company for QNB Bank that engages in the provision of commercial and retail banking products, and retail brokerage services. It offers various deposit products, which include demand and savings accounts, such as money market, interest-bearing demand, club, traditional statement savings, and online savings accounts; and time deposits comprising certificates of deposit and individual retirement accounts. The company also provides commercial and industrial loans, commercial and residential real estate loans, construction and land development loans, indirect lease financing, 1-4 family residential mortgage loans, home equity loans and lines of credit, and consumer loans. In addition, it offers retail brokerage and advisory services; credit cards and insurance products; merchant services; ATM and debit card services; and internet and mobile-banking, electronic bill pay, and remote deposit capture services. The company serves other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies, and brokerage companies. QNB Corp. was founded in 1877 and is based in Quakertown, Pennsylvania.