Salisbury Bancorp (NASDAQ: SAL) and Two River Bancorp (NASDAQ:TRCB) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, dividends, earnings, valuation, risk, analyst recommendations and institutional ownership.

Profitability

This table compares Salisbury Bancorp and Two River Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Salisbury Bancorp 15.26% 6.95% 0.70%
Two River Bancorp 20.45% 8.29% 0.88%

Institutional & Insider Ownership

9.9% of Salisbury Bancorp shares are owned by institutional investors. Comparatively, 23.3% of Two River Bancorp shares are owned by institutional investors. 19.1% of Salisbury Bancorp shares are owned by company insiders. Comparatively, 16.5% of Two River Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Salisbury Bancorp and Two River Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Salisbury Bancorp 0 0 1 0 3.00
Two River Bancorp 0 0 0 0 N/A

Salisbury Bancorp presently has a consensus price target of $51.00, indicating a potential upside of 13.21%. Given Salisbury Bancorp’s higher possible upside, equities research analysts clearly believe Salisbury Bancorp is more favorable than Two River Bancorp.

Risk and Volatility

Salisbury Bancorp has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Two River Bancorp has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Valuation & Earnings

This table compares Salisbury Bancorp and Two River Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Salisbury Bancorp $42.35 million 2.97 $6.68 million $2.40 18.77
Two River Bancorp $40.11 million 3.95 $8.63 million $0.95 19.72

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

Dividends

Salisbury Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. Two River Bancorp pays an annual dividend of $0.18 per share and has a dividend yield of 1.0%. Salisbury Bancorp pays out 46.7% of its earnings in the form of a dividend. Two River Bancorp pays out 18.9% 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.

Summary

Salisbury Bancorp beats Two River Bancorp on 8 of the 15 factors compared between the two stocks.

Salisbury Bancorp Company Profile

Salisbury Bancorp, Inc. is a bank holding company for Salisbury Bank and Trust Company (the Bank). The Bank is a Connecticut-chartered and Federal Deposit Insurance Corporation (the FDIC) insured commercial bank. The Bank provides commercial banking, consumer financing, retail banking and trust and wealth advisory services through a network of over 10 banking offices and approximately nine automated teller machines (ATMs). The Bank originates commercial loans, commercial real estate loans, residential and commercial construction loans, residential real estate loans collateralized by one- to four- family residences, home equity lines of credit, fixed rate loans and other consumer loans. The Bank’s securities portfolio include the United States Government and Agency securities, mortgage-backed securities, collateralized mortgage obligations and tax exempt municipal bonds. The Bank uses deposits, repayments and sales, and borrowings to fund lending, investing and general operations.

Two River Bancorp Company Profile

Two River Bancorp is the holding company for Two River Community Bank (the Bank). The Company acts as an independent community financial services provider. The Company’s segment is community banking operations. The Bank is a state-chartered commercial bank. The Bank offers a range of banking services, including demand, savings and time deposits, and commercial loans, residential loans and consumer/installment loans to small and medium-sized businesses, not-for-profit organizations, professionals and individuals primarily in Monmouth, Middlesex and Union Counties, New Jersey. The Bank also offers its customers various banking products, such as night depository, wire transfers, money orders, automated teller machines, direct deposit, telephone and Internet banking and corporate business services. It also offers customers a range of electronic banking services. The Bank’s deposits consist of checking accounts, savings accounts, money market accounts and certificates of deposit.

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