Reviewing Peoples Bancorp (NASDAQ:PEBO) & VersaBank (NASDAQ:VBNK)

Peoples Bancorp (NASDAQ:PEBO) and VersaBank (NASDAQ:VBNK) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.

Dividends

Peoples Bancorp pays an annual dividend of $1.68 per share and has a dividend yield of 4.1%. VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.4%. Peoples Bancorp pays out 50.8% of its earnings in the form of a dividend. VersaBank pays out 10.1% 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. Peoples Bancorp has raised its dividend for 10 consecutive years. Peoples Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Peoples Bancorp has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500. Comparatively, VersaBank has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500.

Earnings & Valuation

This table compares Peoples Bancorp and VersaBank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peoples Bancorp	$458.86 million	3.22	$106.78 million	$3.31	12.44
VersaBank	$217.14 million	2.85	$20.32 million	$0.69	27.72

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

Insider & Institutional Ownership

60.7% of Peoples Bancorp shares are owned by institutional investors. Comparatively, 56.9% of VersaBank shares are owned by institutional investors. 3.3% of Peoples Bancorp shares are owned by company insiders. Comparatively, 5.3% of VersaBank shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Peoples Bancorp and VersaBank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peoples Bancorp	19.17%	10.71%	1.35%
VersaBank	9.34%	8.32%	0.75%

Analyst Ratings

This is a summary of recent ratings and price targets for Peoples Bancorp and VersaBank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peoples Bancorp	0	3	3	0	2.50
VersaBank	0	1	1	1	3.00

Peoples Bancorp presently has a consensus price target of $42.00, suggesting a potential upside of 2.03%. VersaBank has a consensus price target of $25.00, suggesting a potential upside of 30.68%. Given VersaBank’s stronger consensus rating and higher probable upside, analysts plainly believe VersaBank is more favorable than Peoples Bancorp.

Summary

Peoples Bancorp beats VersaBank on 11 of the 18 factors compared between the two stocks.

About Peoples Bancorp

Peoples Bancorp Inc. operates as the holding company for Peoples Bank that provides commercial and consumer banking products and services. The company accepts various deposit products, including demand deposit accounts, savings accounts, money market accounts, certificates of deposit, and governmental deposits; and provides commercial and industrial, commercial real estate, construction, finance, residential real estate, and consumer indirect and direct loans, as well as home equity lines of credit and overdrafts. It also offers debit and automated teller machine (ATM) cards; safe deposit rental facilities; money orders and cashier’s checks; and telephone, mobile, and online banking services. In addition, the company provides various life, health, and property and casualty insurance products; third-party insurance administration; interactive teller machines; insurance premium financing; check deposit and alert notification; commercial and technology equipment leasing; fiduciary and trust; underwriting, origination, and servicing of equipment leases, and equipment financing agreements; and asset management and administration services, as well as employee benefit, retirement, and health care plan administration services. Further, it offers brokerage services through an unaffiliated registered broker-dealers; insurance premium finance lending and leasing; and credit cards to individuals and businesses, as well as provides merchant credit card transaction processing, and person-to-person payment processing services. Peoples Bancorp Inc. was founded in 1902 and is headquartered in Marietta, Ohio.

About VersaBank

VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.