Comparing 1st Constitution Bancorp (NJ) (FCCY) and Dime Community Bancshares (DCOM)

1st Constitution Bancorp (NJ) (NASDAQ: FCCY) and Dime Community Bancshares (NASDAQ:DCOM) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Analyst Recommendations

This is a breakdown of recent ratings for 1st Constitution Bancorp (NJ) and Dime Community Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
1st Constitution Bancorp (NJ) 0 1 0 0 2.00
Dime Community Bancshares 1 1 1 0 2.00

1st Constitution Bancorp (NJ) currently has a consensus target price of $18.00, suggesting a potential downside of 2.70%. Dime Community Bancshares has a consensus target price of $22.17, suggesting a potential downside of 0.15%. Given Dime Community Bancshares’ higher probable upside, analysts clearly believe Dime Community Bancshares is more favorable than 1st Constitution Bancorp (NJ).

Earnings and Valuation

This table compares 1st Constitution Bancorp (NJ) and Dime Community Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
1st Constitution Bancorp (NJ) $43.99 million 3.39 $8.15 million $1.01 18.32
Dime Community Bancshares $153.49 million 5.42 $37.45 million $1.00 22.20

Dime Community Bancshares has higher revenue and earnings than 1st Constitution Bancorp (NJ). 1st Constitution Bancorp (NJ) is trading at a lower price-to-earnings ratio than Dime Community Bancshares, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 1st Constitution Bancorp (NJ) and Dime Community Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
1st Constitution Bancorp (NJ) 16.78% 7.88% 0.81%
Dime Community Bancshares 16.23% 8.04% 0.76%

Insider & Institutional Ownership

27.0% of 1st Constitution Bancorp (NJ) shares are held by institutional investors. Comparatively, 68.0% of Dime Community Bancshares shares are held by institutional investors. 20.0% of 1st Constitution Bancorp (NJ) shares are held by insiders. Comparatively, 12.7% of Dime Community Bancshares 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.

Dividends

1st Constitution Bancorp (NJ) pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. Dime Community Bancshares pays an annual dividend of $0.56 per share and has a dividend yield of 2.5%. 1st Constitution Bancorp (NJ) pays out 19.8% of its earnings in the form of a dividend. Dime Community Bancshares pays out 56.0% 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.

Volatility and Risk

1st Constitution Bancorp (NJ) has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Dime Community Bancshares has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Summary

Dime Community Bancshares beats 1st Constitution Bancorp (NJ) on 10 of the 15 factors compared between the two stocks.

About 1st Constitution Bancorp (NJ)

1st Constitution Bancorp is the bank holding company for 1st Constitution Bank (the Bank). The Bank is a commercial bank, which is engaged in the business of commercial and retail banking. The Company operates through the Community Banking segment. The Community Banking segment consists of construction, commercial, retail and mortgage banking operations. As a community bank, the Bank offers a range of services (including demand, savings and time deposits and commercial and consumer/installment loans) to individuals, small businesses and not-for-profit organizations principally in the Fort Lee area of Bergen County and in Middlesex, Mercer, Somerset and Monmouth Counties of New Jersey. The Bank’s Mortgage Warehouse Funding Group offers revolving lines of credit that are available to licensed mortgage banking companies (the Warehouse Line of Credit). The Bank’s investment activities are classified as available for sale and held to maturity securities.

About Dime Community Bancshares

Dime Community Bancshares, Inc. operates as a holding company for Dime Community Bank (the Bank), a chartered savings bank. The Company is a unitary savings and loan holding company. The Company operates through Community Banking segment. The Bank’s principal business is gathering retail deposits, and lending them primarily in multifamily residential, commercial real estate and mixed use loans, as well as investing in mortgage-backed securities (MBS), obligations of the United States Government and Government Sponsored Entities (GSEs), and corporate debt and equity securities. The Bank’s primary sources of funds are, in general, deposits; loan amortization, prepayments and maturities; MBS amortization, prepayments and maturities; investment securities maturities and sales, and advances from the Federal Home Loan Bank of New York (FHLBNY).

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