Select Bancorp (NASDAQ: SLCT) and Lakeland Bancorp (NASDAQ:LBAI) are both small-cap financials companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

19.5% of Select Bancorp shares are owned by institutional investors. Comparatively, 53.0% of Lakeland Bancorp shares are owned by institutional investors. 14.2% of Select Bancorp shares are owned by company insiders. Comparatively, 6.2% of Lakeland Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Select Bancorp and Lakeland Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Select Bancorp 16.86% 6.38% 0.77%
Lakeland Bancorp 24.38% 9.37% 1.00%

Dividends

Lakeland Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.0%. Select Bancorp does not pay a dividend. Lakeland Bancorp pays out 36.7% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent recommendations for Select Bancorp and Lakeland Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Select Bancorp 0 1 0 0 2.00
Lakeland Bancorp 0 1 1 0 2.50

Select Bancorp presently has a consensus price target of $13.00, suggesting a potential downside of 0.15%. Lakeland Bancorp has a consensus price target of $24.50, suggesting a potential upside of 24.37%. Given Lakeland Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Lakeland Bancorp is more favorable than Select Bancorp.

Risk and Volatility

Select Bancorp has a beta of 0.31, suggesting that its share price is 69% less volatile than the S&P 500. Comparatively, Lakeland Bancorp has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Select Bancorp $37.93 million 4.00 $6.75 million $0.58 22.45
Lakeland Bancorp $215.64 million 4.33 $52.58 million $1.09 18.07

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

Summary

Lakeland Bancorp beats Select Bancorp on 13 of the 16 factors compared between the two stocks.

Select Bancorp Company Profile

Select Bancorp, Inc. is the bank holding company for Select Bank & Trust Company (the Bank). The Bank is a commercial bank. The Bank provides commercial and retail financial services to customers located in its market areas. The Bank offers a range of banking services, including checking and savings accounts, commercial, consumer, mortgage and personal loans, and other associated financial services. The Bank’s lending activities are oriented to the consumer/retail customer, as well as to the small-to-medium sized businesses located in central and eastern North Carolina. The Bank offers commercial, consumer and mortgage lending products. It originates construction loans for the purpose of acquisition, development and construction of both residential and commercial properties (ADC loans). The Bank’s deposits include savings, negotiable order of withdrawal (NOW) account and money market deposits, time deposits and non-interest-bearing deposits.

Lakeland Bancorp Company Profile

Lakeland Bancorp, Inc. is the bank holding company for Lakeland Bank (Lakeland). Lakeland operates under a state bank charter and provides full banking services. Lakeland generates commercial, mortgage and consumer loans and receives deposits from customers located in Northern and Central New Jersey. Lakeland also provides non-deposit products, such as securities brokerage services, including mutual funds and variable annuities. Through Lakeland, the Company offers a range of lending, depository and related financial services to individuals and small to medium sized businesses located in northern and central New Jersey. Lakeland’s equipment financing division provides a solution to small and medium sized companies preferring to lease equipment over other financial alternatives. Lakeland’s asset based loan department provides commercial borrowers with another lending alternative. It also offers wire transfer, Internet banking, mobile banking and night depository services.

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