First Business Financial Services (NASDAQ:FBIZ) vs. Republic Bancorp (NASDAQ:RBCAA) Financial Comparison

First Business Financial Services (NASDAQ:FBIZ) and Republic Bancorp (NASDAQ:RBCAA) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, profitability, valuation and earnings.

Insider and Institutional Ownership

60.1% of First Business Financial Services shares are owned by institutional investors. Comparatively, 24.4% of Republic Bancorp shares are owned by institutional investors. 5.1% of First Business Financial Services shares are owned by insiders. Comparatively, 56.4% of Republic Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

First Business Financial Services has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500. Comparatively, Republic Bancorp has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for First Business Financial Services and Republic Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Business Financial Services	0	0	4	0	3.00
Republic Bancorp	0	1	0	0	2.00

First Business Financial Services presently has a consensus price target of $57.25, suggesting a potential upside of 22.30%. Republic Bancorp has a consensus price target of $69.00, suggesting a potential upside of 1.71%. Given First Business Financial Services’ stronger consensus rating and higher probable upside, analysts clearly believe First Business Financial Services is more favorable than Republic Bancorp.

Earnings & Valuation

This table compares First Business Financial Services and Republic Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Business Financial Services	$158.03 million	2.46	$44.24 million	$5.50	8.51
Republic Bancorp	$394.17 million	3.36	$101.37 million	$6.07	11.18

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

Profitability

This table compares First Business Financial Services and Republic Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Business Financial Services	16.86%	14.33%	1.16%
Republic Bancorp	20.05%	10.60%	1.51%

Dividends

First Business Financial Services pays an annual dividend of $1.16 per share and has a dividend yield of 2.5%. Republic Bancorp pays an annual dividend of $1.80 per share and has a dividend yield of 2.7%. First Business Financial Services pays out 21.1% of its earnings in the form of a dividend. Republic Bancorp pays out 29.7% 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. First Business Financial Services has raised its dividend for 13 consecutive years and Republic Bancorp has raised its dividend for 27 consecutive years. Republic Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Republic Bancorp beats First Business Financial Services on 10 of the 17 factors compared between the two stocks.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.

About Republic Bancorp

Republic Bancorp, Inc. operates as a bank holding company for Republic Bank & Trust Company that provides various banking products and services in the United States. It operates in six segments: Traditional Banking, Warehouse, Mortgage Banking, Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions. The company offers demand, money market accounts, savings, individual retirement accounts, time, brokered, and other certificates of deposit; and retail and commercial mortgage, construction and land development, consumer, aircraft, and marine loans. It also provides credit cards; title insurance and other financial products and services; and private banking, lockbox processing, remote deposit capture, business online banking, account reconciliation, automated clearing house processing, and internet and mobile banking services. In addition, it offers short-term and revolving credit facilities to mortgage bankers through mortgage warehouse lines of credit; mortgage banking; tax refund solutions, which facilitate the receipt and payment of federal and state tax refund products through third-party tax preparers and tax-preparation software providers; payments-related products and services to consumers through third party service providers; and consumer credit products. The company offers its services through full-services banking centers in Kentucky, Indiana, Florida, Ohio, and Tennessee. Republic Bancorp, Inc. was incorporated in 1974 and is headquartered in Louisville, Kentucky.