DNB Financial (NASDAQ: DNBF) and Bank Of Princeton (NASDAQ:BPRN) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for DNB Financial and Bank Of Princeton, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DNB Financial 0 1 0 0 2.00
Bank Of Princeton 0 1 3 0 2.75

DNB Financial presently has a consensus price target of $37.00, indicating a potential upside of 13.50%. Bank Of Princeton has a consensus price target of $36.50, indicating a potential upside of 12.52%. Given DNB Financial’s higher probable upside, equities analysts plainly believe DNB Financial is more favorable than Bank Of Princeton.

Institutional & Insider Ownership

30.4% of DNB Financial shares are held by institutional investors. Comparatively, 24.6% of Bank Of Princeton shares are held by institutional investors. 18.4% of DNB Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

DNB Financial pays an annual dividend of $0.28 per share and has a dividend yield of 0.9%. Bank Of Princeton does not pay a dividend. DNB Financial pays out 15.1% of its earnings in the form of a dividend.

Profitability

This table compares DNB Financial and Bank Of Princeton’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DNB Financial 16.42% 8.86% 0.82%
Bank Of Princeton N/A N/A N/A

Earnings & Valuation

This table compares DNB Financial and Bank Of Princeton’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DNB Financial $48.40 million 2.88 $7.95 million $1.85 17.62
Bank Of Princeton $50.80 million 3.81 $11.74 million $1.97 16.47

Bank Of Princeton has higher revenue and earnings than DNB Financial. Bank Of Princeton is trading at a lower price-to-earnings ratio than DNB Financial, indicating that it is currently the more affordable of the two stocks.

Summary

DNB Financial beats Bank Of Princeton on 8 of the 15 factors compared between the two stocks.

DNB Financial Company Profile

DNB Financial Corporation is a bank holding company for DNB First, National Association (the Bank). The Company operates through the Community Banking segment. The Bank is a commercial bank providing a range of services to individuals and small to medium sized businesses in the southeastern Pennsylvania market area, including accepting time, demand and savings deposits, and making secured and unsecured commercial, real estate and consumer loans. In addition, the Bank has over 10 branches and a wealth management group, DNB First Wealth Management. Its loan and lease portfolio consists primarily of commercial and residential real estate loans, commercial loans and lines of credit (including commercial construction), commercial leases and consumer loans. Its investment portfolio includes the United States agency securities, bank stocks, and other bonds and notes. Its primary source of funds is derived from customer deposits, which are typically generated by its branch offices.

Bank Of Princeton Company Profile

The Bank of Princeton provides various banking products and services in the United States. The company offers checking accounts, savings accounts, attorney trust accounts, money market accounts, and certificates of deposit; and commercial real estate, commercial and industrial, construction, residential first-lien mortgage, home equity, and consumer loans, as well as lines of credit. It also provides money order, cashierÂ’s check, wire transfer, savings bonds redemption, debit card, direct deposit, safe deposit box, night depository, automated teller machine, and remote deposit capture services, as well as online and telephone banking services. The company operates 13 branches in Princeton, including parts of Mercer, Somerset, Hunterdon, Monmouth, and Middlesex Counties in central New Jersey, as well as portions of Philadelphia, Montgomery, and Bucks Counties in Pennsylvania. The Bank of Princeton was founded in 2007 and is headquartered in Princeton, New Jersey.

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