Analyzing LINKBANCORP (NASDAQ:LNKB) and BayFirst Financial (NASDAQ:BAFN)

LINKBANCORP (NASDAQ:LNKB) and BayFirst Financial (NASDAQ:BAFN) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, risk, analyst recommendations, profitability, valuation and earnings.

Dividends

LINKBANCORP pays an annual dividend of $0.30 per share and has a dividend yield of 4.1%. BayFirst Financial pays an annual dividend of $0.32 per share and has a dividend yield of 2.5%. LINKBANCORP pays out -115.4% of its earnings in the form of a dividend. BayFirst Financial pays out 28.3% 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. LINKBANCORP is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares LINKBANCORP and BayFirst Financial’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LINKBANCORP	$66.29 million	4.16	-$11.97 million	($0.26)	-28.42
BayFirst Financial	$118.27 million	0.45	$5.70 million	$1.13	11.50

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

Profitability

This table compares LINKBANCORP and BayFirst Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LINKBANCORP	-5.10%	5.47%	0.56%
BayFirst Financial	4.01%	6.39%	0.48%

Volatility & Risk

LINKBANCORP has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, BayFirst Financial has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for LINKBANCORP and BayFirst Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LINKBANCORP	0	1	0	0	2.00
BayFirst Financial	0	0	0	0	N/A

LINKBANCORP presently has a consensus target price of $7.50, indicating a potential upside of 1.49%. Given LINKBANCORP’s higher possible upside, analysts plainly believe LINKBANCORP is more favorable than BayFirst Financial.

Institutional and Insider Ownership

37.5% of LINKBANCORP shares are owned by institutional investors. Comparatively, 16.9% of BayFirst Financial shares are owned by institutional investors. 35.8% of LINKBANCORP shares are owned by company insiders. Comparatively, 19.2% of BayFirst Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

LINKBANCORP beats BayFirst Financial on 8 of the 14 factors compared between the two stocks.

About LINKBANCORP

LINKBANCORP, Inc. operates as a bank holding company for The Gratz Bank, that provides various banking products and services to individuals, families, nonprofit, and business customers in Pennsylvania. Its deposit products include demand, saving, and money market accounts, as well as certificates of deposits. The company also offers commercial real estate, commercial business, commercial real estate construction, land development, residential real estate, home equity, consumer, agricultural, and municipal loans. It also provides online banking, mobile banking, direct and remote deposit, and cash management services. The company was incorporated in 2018 and is headquartered in Camp Hill, Pennsylvania.

About BayFirst Financial

BayFirst Financial Corp. operates as the bank holding company for BayFirst National Bank that provides community banking services for businesses and individuals. The company offers checking, savings, NOW, and money market deposit accounts, as well as certificates of deposit and individual retirement account; and safety deposit boxes. It also provides commercial real estate mortgages; construction and development, working capital, and business loans; auto, boat, and recreational vehicle loans; and residential mortgages, personal lines of credit, and home equity lines of credit. In addition, the company offers mobile and online banking, treasury management, wire transfers, cash management, merchant processing, remote deposit capture, night depositor, online bill payment, courier, retail investment, ACH originations, and other services. It operates full-service banking centers in St. Petersburg, Seminole, Pinellas Park, Clearwater, Sarasota, Tampa, Belleair Bluffs, and Bradenton, Florida. The company was formerly known as First Home Bancorp, Inc. and changed its name to BayFirst Financial Corp. in May 2021. BayFirst Financial Corp. was founded in 1999 and is headquartered in St. Petersburg, Florida.