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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Peoples Bancorp and FS Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Peoples Bancorp 0 4 0 0 2.00
FS Bancorp 0 1 2 0 2.67

Peoples Bancorp presently has a consensus price target of $34.67, suggesting a potential downside of 3.27%. FS Bancorp has a consensus price target of $46.33, suggesting a potential downside of 17.26%. Given Peoples Bancorp’s higher possible upside, equities research analysts clearly believe Peoples Bancorp is more favorable than FS Bancorp.

Risk and Volatility

Peoples Bancorp has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, FS Bancorp has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Insider and Institutional Ownership

63.7% of Peoples Bancorp shares are held by institutional investors. Comparatively, 43.3% of FS Bancorp shares are held by institutional investors. 3.0% of Peoples Bancorp shares are held by company insiders. Comparatively, 13.2% of FS Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Peoples Bancorp and FS Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Peoples Bancorp $179.18 million 3.66 $38.47 million $2.10 17.07
FS Bancorp $70.25 million 2.93 $14.09 million $4.31 12.99

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

Profitability

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

Net Margins Return on Equity Return on Assets
Peoples Bancorp 21.47% 8.61% 1.10%
FS Bancorp 20.05% 14.11% 1.47%

Dividends

Peoples Bancorp pays an annual dividend of $0.88 per share and has a dividend yield of 2.5%. FS Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 0.8%. Peoples Bancorp pays out 41.9% of its earnings in the form of a dividend. FS Bancorp pays out 10.2% 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

Peoples Bancorp beats FS Bancorp on 9 of the 16 factors compared between the two stocks.

Peoples Bancorp Company Profile

Peoples Bancorp Inc. is a financial holding company. The Company operates principally through its subsidiary, Peoples Bank. Peoples Bank’s operating subsidiaries include Peoples Insurance Agency, LLC (Peoples Insurance) and two asset management companies, PBNA, L.L.C. and Peoples Tax Credit Equity, LLC. Peoples Investment Company has one subsidiary, Peoples Capital Corporation. The Company offers banking, insurance, investment and trust solutions. Its products and services include various demand deposit accounts, savings accounts, money market accounts and certificates of deposit; commercial, consumer and real estate mortgage loans (both commercial and residential) and lines of credit; debit and automated teller machine (ATM) cards; credit cards for individuals and businesses; merchant credit card transaction processing services; corporate and personal trust services; a range of life, health and property and casualty insurance products, and brokerage services.

FS Bancorp Company Profile

FS Bancorp, Inc. is a holding company for 1st Security Bank of Washington (the Bank). The Company is a diversified lender with a focus on the origination of indirect home improvement loans, also referred to as fixture secured loans, commercial real estate mortgage loans, home loans, commercial business loans and second mortgage and home equity loan products. The Company operates through the community banking segment. The Bank is a relationship-driven community bank. The Bank offers banking and financial services to local families, local and regional businesses and various industries within distinct Puget Sound area communities. It offers a range of commercial real estate loans, which are secured by income producing properties, including retail centers, warehouses and office buildings located in the market areas. It offers a range of deposit instruments, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit.

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