Enterprise Bancorp (NASDAQ:EBTC) and Community Trust Bancorp (NASDAQ:CTBI) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Earnings and Valuation

This table compares Enterprise Bancorp and Community Trust Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enterprise Bancorp $120.71 million 3.06 $19.39 million N/A N/A
Community Trust Bancorp $204.20 million 3.70 $51.49 million $2.80 15.22

Community Trust Bancorp has higher revenue and earnings than Enterprise Bancorp.

Institutional and Insider Ownership

21.4% of Enterprise Bancorp shares are owned by institutional investors. Comparatively, 58.4% of Community Trust Bancorp shares are owned by institutional investors. 19.0% of Enterprise Bancorp shares are owned by insiders. Comparatively, 4.8% of Community Trust Bancorp shares are owned by 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

Enterprise Bancorp pays an annual dividend of $0.58 per share and has a dividend yield of 1.8%. Community Trust Bancorp pays an annual dividend of $1.44 per share and has a dividend yield of 3.4%. Community Trust Bancorp pays out 51.4% of its earnings in the form of a dividend. Enterprise Bancorp has raised its dividend for 5 consecutive years and Community Trust Bancorp has raised its dividend for 37 consecutive years. Community Trust Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Enterprise Bancorp and Community Trust Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enterprise Bancorp 18.71% 12.68% 1.04%
Community Trust Bancorp 26.68% 10.95% 1.42%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Enterprise Bancorp and Community Trust Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enterprise Bancorp 0 0 0 0 N/A
Community Trust Bancorp 0 0 0 0 N/A

Risk & Volatility

Enterprise Bancorp has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Community Trust Bancorp has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Summary

Community Trust Bancorp beats Enterprise Bancorp on 9 of the 13 factors compared between the two stocks.

About Enterprise Bancorp

Enterprise Bancorp, Inc. operates as the holding company for Enterprise Bank and Trust Company that provides various banking products and services primarily in the greater Merrimack Valley and North Central regions of Massachusetts and Southern New Hampshire. The company offers commercial checking, business and municipal savings accounts, term certificates of deposit, money market and business sweep accounts, interest on lawyers trust accounts, escrow management accounts, personal checking accounts, savings accounts, and individual retirement accounts, as well as checking and simplified employee pension accounts. It also provides commercial mortgage loans, construction and land development loans, secured and unsecured commercial loans and lines of credit, and letters of credit; and conventional residential mortgage loans, home equity loans and lines, residential construction loans on primary and secondary residences, and secured and unsecured personal loans and lines of credit, as well as equipment lease financing services. In addition, the company offers cash management services; various investment advisory and management services, including customized investment management and trust services to individuals, family groups, commercial businesses, trusts, foundations, non-profit organizations, and endowments; and insurance products, such as property and casualty, employee benefits, and risk-management solutions. As of January 25, 2018, it had 24 full-service branches located in the Massachusetts communities of Lowell, Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Lawrence, Leominster, Methuen, Tewksbury, Tyngsborough, and Westford; and the New Hampshire communities of Derry, Hudson, Nashua, Pelham, Salem, and Windham. The company primarily serves business entities, non-profit organizations, professionals, and individuals. Enterprise Bancorp, Inc. was founded in 1989 and is headquartered in Lowell, Massachusetts.

About Community Trust Bancorp

Community Trust Bancorp, Inc. operates as the bank holding company for Community Trust Bank, Inc. that provides commercial and personal banking services to small and mid-sized communities. The company accepts time and demand deposits, Keogh plans, and savings certificates, as well as checking and savings, individual retirement, NOW, and money market accounts. It also offers loan products, such as commercial and residential real estate loans; commercial, construction and development, mortgage, and personal loans, as well as consumer, and secured and unsecured loans; and lease-financing, lines of credit, revolving lines of credit, and term loans, as well as other specialized loans, including asset-based financing. In addition, the company provides cash management, safe deposit boxes rental, and funds transfer services; issues letters of credit; and acts as a trustee of personal trusts, executor of estates, trustee for employee benefit trusts, and paying agent for bond and stock issues, as well as an investment agent and depositor for securities. Further, it offers full service securities brokerage, and trust and wealth management services; debit cards; annuity and life insurance products; and repurchase agreements. As of January 26, 2018, the company operated 70 banking locations in eastern, northeastern, central, and south central Kentucky; 6 banking locations in southern West Virginia; 4 banking locations in northeastern Tennessee; 4 trust offices in Kentucky; and 1 trust office in Tennessee. Community Trust Bancorp, Inc. was founded in 1903 and is headquartered in Pikeville, Kentucky.

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