Critical Review: California First National Bancorp (CFNB) vs. Cape Bancorp (CBNJ)

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

Insider & Institutional Ownership

12.5% of California First National Bancorp shares are held by institutional investors. 78.5% of California First National Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares California First National Bancorp and Cape Bancorp’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%
Cape Bancorp 13.12% 4.73% 0.50%

Volatility & Risk

California First National Bancorp has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500. Comparatively, Cape Bancorp has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for California First National Bancorp and Cape Bancorp, 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
Cape Bancorp 0 0 0 0 N/A

Dividends

California First National Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 3.2%. Cape Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. California First National Bancorp pays out 43.2% of its earnings in the form of a dividend. Cape Bancorp pays out 43.5% 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. California First National Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
California First National Bancorp $36.69 million 4.22 $11.12 million $1.11 13.56
Cape Bancorp N/A N/A N/A $0.92 15.86

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

Summary

California First National Bancorp beats Cape Bancorp on 9 of the 11 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 Cape Bancorp

Cape Bancorp, Inc. (Cape Bancorp) is the holding company of Cape Bank (the Bank). The Bank focuses on providing deposit and loan products to retail customers and to small and mid-sized businesses from its fourteen full service branch offices, located in Atlantic and Cape May Counties, one drive-up teller/ATM operation in Atlantic County, three market development offices (MDOs) located in Burlington, Cape May and Atlantic Counties in New Jersey, and two MDOs in Pennsylvania servicing the five county Philadelphia market located in Radnor, Delaware County and in Philadelphia. It attracts deposits from the general public and uses those funds to originate a variety of loans, including commercial mortgages, commercial business loans, home equity loans and lines of credit (HELOC) and construction loans. Its retail and business banking deposit products include checking accounts, money market accounts, savings accounts, and certificates of deposit with terms ranging from 30 days to 60 months.

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