Republic First Bancorp (NASDAQ: FRBK) and Capstar Financial (NASDAQ:CSTR) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

54.3% of Republic First Bancorp shares are owned by institutional investors. Comparatively, 35.6% of Capstar Financial shares are owned by institutional investors. 12.2% of Republic First Bancorp shares are owned by company insiders. Comparatively, 19.3% of Capstar Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Republic First Bancorp and Capstar Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Republic First Bancorp $69.35 million 7.07 $4.94 million $0.14 61.43
Capstar Financial $56.48 million 4.10 $9.09 million $0.35 58.20

Capstar Financial has lower revenue, but higher earnings than Republic First Bancorp. Capstar Financial is trading at a lower price-to-earnings ratio than Republic First Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Republic First Bancorp and Capstar Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Republic First Bancorp 0 1 0 0 2.00
Capstar Financial 0 3 0 0 2.00

Republic First Bancorp presently has a consensus price target of $9.00, suggesting a potential upside of 4.65%. Capstar Financial has a consensus price target of $18.00, suggesting a potential downside of 11.63%. Given Republic First Bancorp’s higher probable upside, research analysts clearly believe Republic First Bancorp is more favorable than Capstar Financial.

Profitability

This table compares Republic First Bancorp and Capstar Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Republic First Bancorp 8.97% 3.48% 0.38%
Capstar Financial 7.05% 9.27% 0.95%

Risk & Volatility

Republic First Bancorp has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, Capstar Financial has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500.

Republic First Bancorp Company Profile

Republic First Bancorp, Inc. is a holding company for Republic First Bank (Republic or the Bank), which does business under the name Republic Bank. The Company’s community banking segment encompasses the commercial loan and deposit activities of Republic, as well as consumer loan products in the areas surrounding its store network. The Company offers a range of banking products and services, including consumer and commercial deposit accounts, checking accounts, interest-bearing demand accounts, money market accounts, certificates of deposit, savings accounts, sweep accounts, lockbox services and individual retirement accounts (and other traditional banking services), secured and unsecured commercial loans, real estate loans, construction and land development loans, automobile loans, home improvement loans, mortgages, home equity and overdraft lines of credit, and other products. The Bank offers a range of credit and depository banking services.

Capstar Financial Company Profile

CapStar Financial Holdings, Inc. is a bank holding company. The Company operates primarily through its subsidiary, CapStar Bank. CapStar Bank is a commercial bank. The Company’s lines of business include commercial and industrial, commercial real estate, healthcare, correspondent banking, personal and private banking and wealth management, and mortgage banking. Its products and services include commercial and industrial loans to small and medium sized businesses, with a particular focus on businesses operating in the healthcare industry; commercial real estate loans; private banking and wealth management services for the owners and operators of business clients and other high net worth individuals, and correspondent banking services. As of June 30, 2016, the Company had seven locations, five of which are retail bank branches and two of which are mortgage origination offices.

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