Franklin Financial Network (NYSE:FSB) and Marlin Business Services (NASDAQ:MRLN) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.
Volatility and Risk
Franklin Financial Network has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Marlin Business Services has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Franklin Financial Network and Marlin Business Services, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Franklin Financial Network||0||6||1||0||2.14|
|Marlin Business Services||0||0||1||0||3.00|
Franklin Financial Network currently has a consensus price target of $39.00, indicating a potential downside of 0.15%. Marlin Business Services has a consensus price target of $29.00, indicating a potential upside of 2.29%. Given Marlin Business Services’ stronger consensus rating and higher probable upside, analysts clearly believe Marlin Business Services is more favorable than Franklin Financial Network.
Insider & Institutional Ownership
64.3% of Franklin Financial Network shares are held by institutional investors. Comparatively, 82.8% of Marlin Business Services shares are held by institutional investors. 11.4% of Franklin Financial Network shares are held by insiders. Comparatively, 7.7% of Marlin Business Services shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Marlin Business Services pays an annual dividend of $0.56 per share and has a dividend yield of 2.0%. Franklin Financial Network does not pay a dividend. Marlin Business Services pays out 37.3% of its earnings in the form of a dividend.
This table compares Franklin Financial Network and Marlin Business Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Franklin Financial Network||19.27%||11.81%||0.95%|
|Marlin Business Services||26.20%||12.48%||2.12%|
Earnings & Valuation
This table compares Franklin Financial Network and Marlin Business Services’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Franklin Financial Network||$147.17 million||3.85||$28.08 million||$2.42||16.14|
|Marlin Business Services||$119.05 million||2.96||$25.29 million||$1.50||18.90|
Franklin Financial Network has higher revenue and earnings than Marlin Business Services. Franklin Financial Network is trading at a lower price-to-earnings ratio than Marlin Business Services, indicating that it is currently the more affordable of the two stocks.
Marlin Business Services beats Franklin Financial Network on 8 of the 15 factors compared between the two stocks.
About Franklin Financial Network
Franklin Financial Network, Inc. operates as the holding company for Franklin Synergy Bank that provides various banking and related financial services to small businesses, corporate entities, local governments, and individuals. The company's deposit products include demand, interest-bearing transaction accounts, money market accounts, certificates of deposit, municipal deposits, savings, and deposit accounts. The company also provides consumer lending solutions, including first mortgage real estate loans, home equity loans, and other personal loans; small business administration, and commercial and industrial loans; and single-family residential mortgage loans and construction loans for residential and commercial purposes. In addition, it offers wealth management/trust services; and retirement planning, financial planning, investment services, and insurance products. The company operates through 13 branches and a loan production office in the Williamson, Rutherford, and Davidson counties in the Nashville metropolitan area. Franklin Financial Network, Inc. was founded in 2007 and is headquartered in Franklin, Tennessee.
About Marlin Business Services
Marlin Business Services Corp., through its subsidiaries, provides equipment financing solutions to small and mid-sized businesses in the United States. It finances approximately 100 categories of equipment, including commercial and industrial, restaurant, auto, medical, VOIP, and printing equipment, as well as computer software, copiers, cash registers, dental implant systems, and other commercial equipment. The company also offers property insurance coverage for its financed equipment; and operates a commercial bank that issues certificates of deposit and money market demand accounts, as well as provides small business loans. Marlin Business Services Corp. provides its solutions through a network of independent commercial equipment dealers and national account programs, as well as through direct solicitation and relationships with select lease and loan brokers. The company was founded in 1997 and is based in Mount Laurel, New Jersey.
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