Critical Analysis: Nicolet Bankshares (NCBS) versus Bridge Capital (BBNK)

Nicolet Bankshares (NASDAQ: NCBS) and Bridge Capital (NASDAQ:BBNK) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, earnings, profitability, analyst recommendations, risk and institutional ownership.

Insider and Institutional Ownership

35.4% of Nicolet Bankshares shares are held by institutional investors. 13.9% of Nicolet Bankshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Nicolet Bankshares and Bridge Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nicolet Bankshares 22.63% 9.45% 1.17%
Bridge Capital 16.16% 8.27% 0.85%

Analyst Recommendations

This is a summary of recent ratings and price targets for Nicolet Bankshares and Bridge Capital, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nicolet Bankshares 0 2 2 0 2.50
Bridge Capital 0 0 0 0 N/A

Nicolet Bankshares currently has a consensus price target of $61.88, indicating a potential upside of 10.31%. Given Nicolet Bankshares’ higher possible upside, equities research analysts clearly believe Nicolet Bankshares is more favorable than Bridge Capital.

Risk & Volatility

Nicolet Bankshares has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500. Comparatively, Bridge Capital has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Earnings and Valuation

This table compares Nicolet Bankshares and Bridge Capital’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Nicolet Bankshares $102.14 million 5.38 $18.46 million $3.11 18.04
Bridge Capital N/A N/A N/A $1.14 26.14

Nicolet Bankshares has higher revenue and earnings than Bridge Capital. Nicolet Bankshares is trading at a lower price-to-earnings ratio than Bridge Capital, indicating that it is currently the more affordable of the two stocks.

Summary

Nicolet Bankshares beats Bridge Capital on 10 of the 11 factors compared between the two stocks.

About Nicolet Bankshares

Nicolet Bankshares, Inc. is a bank holding company. The Company conducts operations through its subsidiary, Nicolet National Bank (the Bank), which is a commercial bank. The Company also owns investment advisory firms, Brookfield Investment Partners, LLC, which provides investment strategy and transactional services to select community banks, and Nicolet Advisory Services, LLC, which conducts brokerage and financial advisory services primarily to individual consumers. The Bank is a service community bank, which offers traditional banking products and services, and wealth management products and services to businesses and individuals. The Company’s principal business is banking, consisting of lending and deposit gathering, as well as ancillary banking-related products and services, to businesses and individuals of the communities it serves, and the operational support to deliver, fund and manage banking products and services.

About Bridge Capital

Bridge Capital Holdings is the bank holding company for Bridge Bank, National Association (the Bank). The Bank’s lending solutions include working capital lines of credit, structured finance (asset-based lending and factoring), 7(a) and 504 Small Business Administration (SBA) loans, commercial real estate loans, sustainable energy project financing, growth capital loans, equipment financing, letters of credit and commercial credit cards. The Bank’s depository and corporate banking services include cash and treasury management solutions, interest-bearing term deposit accounts, checking accounts, Automated Clearing House (ACH) payment and wire solutions, fraud protection, remote deposit capture, courier services and online banking. The Bank’s international banking services include foreign exchange (FX payments and hedging), letters of credit, and import and export financing. The Bank provides banking services to businesses located across the San Francisco Bay Area.

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