California First National Bancorp (OTCMKTS: CFNB) and Park Sterling Corporation (NASDAQ:PSTB) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares California First National Bancorp and Park Sterling Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
California First National Bancorp 32.09% 5.92% 1.41%
Park Sterling Corporation 20.24% 9.08% 1.01%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for California First National Bancorp and Park Sterling Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
California First National Bancorp 0 0 0 0 N/A
Park Sterling Corporation 0 3 0 0 2.00

Park Sterling Corporation has a consensus target price of $10.50, indicating a potential downside of 14.77%. Given Park Sterling Corporation’s higher probable upside, analysts clearly believe Park Sterling Corporation is more favorable than California First National Bancorp.

Earnings and Valuation

This table compares California First National Bancorp and Park Sterling Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
California First National Bancorp $36.69 million 4.27 $11.12 million $1.11 13.74
Park Sterling Corporation $140.91 million 4.65 $19.94 million $0.56 22.00

Park Sterling Corporation has higher revenue and earnings than California First National Bancorp. California First National Bancorp is trading at a lower price-to-earnings ratio than Park Sterling Corporation, indicating that it is currently the more affordable of the two stocks.

Dividends

California First National Bancorp pays an annual dividend of $0.46 per share and has a dividend yield of 3.0%. Park Sterling Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 1.3%. California First National Bancorp pays out 41.4% of its earnings in the form of a dividend. Park Sterling Corporation pays out 28.6% 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.

Insider & Institutional Ownership

12.1% of California First National Bancorp shares are held by institutional investors. Comparatively, 81.8% of Park Sterling Corporation shares are held by institutional investors. 78.5% of California First National Bancorp shares are held by insiders. Comparatively, 7.3% of Park Sterling Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

California First National Bancorp has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, Park Sterling Corporation has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500.

Summary

Park Sterling Corporation beats California First National Bancorp on 9 of the 14 factors compared between the two stocks.

About California First National Bancorp

California First National Bancorp is a bank holding company of California First National Bank (CalFirst Bank or the Bank) and leasing subsidiary, California First Leasing Corp (CalFirst Leasing). The primary business of the Company is secured financing provided through leasing and financing capital assets, commercial loans acquired through participation in the syndicated commercial loan market, by providing non-recourse loans to third parties secured by leases and equipment, and direct commercial loans. Its segments include CalFirst Bank and CalFirst Leasing. CalFirst Bank gathers deposits through posting rates on the Internet and conducts all banking and other operations from one central location. It provides leasing and financing to customers throughout the United States and across a range of industries and disciplines, including commercial, industrial and financial companies, as well as educational, government and non-profit entities.

About Park Sterling Corporation

Park Sterling Corporation is a holding company for Park Sterling Bank (the Bank). The Bank is a North Carolina-chartered commercial non-member bank. The Company provides banking services to small and medium-sized businesses, real estate owners, residential builders, institutions, professionals and consumers doing business or residing within its target markets. It provides a range of banking products, including personal, business and non-profit checking accounts, interest on lawyer trust accounts (IOLTA), individual retirement accounts, business and personal money market accounts, time deposits, overdraft protection, safe deposit boxes, and online and mobile banking. Its wealth management activities include investment management, private banking, personal trust and investment brokerage services. Its cash management activities include remote deposit capture, lockbox services, sweep accounts, purchasing cards, automated clearing house (ACH) and wire payments.

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