Pinnacle Bankshares (OTCMKTS:PPBN) vs. South Atlantic Bancshares (OTCMKTS:SABK) Critical Review

South Atlantic Bancshares (OTCMKTS:SABK) and Pinnacle Bankshares (OTCMKTS:PPBN) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Dividends

South Atlantic Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Pinnacle Bankshares pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. South Atlantic Bancshares pays out 4.4% of its earnings in the form of a dividend. Pinnacle Bankshares pays out 23.0% 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.

Earnings and Valuation

This table compares South Atlantic Bancshares and Pinnacle Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
South Atlantic Bancshares	$102.25 million	1.91	$17.10 million	$2.25	11.41
Pinnacle Bankshares	$59.05 million	2.02	$10.77 million	$5.21	10.57

South Atlantic Bancshares has higher revenue and earnings than Pinnacle Bankshares. Pinnacle Bankshares is trading at a lower price-to-earnings ratio than South Atlantic Bancshares, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for South Atlantic Bancshares and Pinnacle Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
South Atlantic Bancshares	0	1	0	0	2.00
Pinnacle Bankshares	0	0	0	0	0.00

Insider & Institutional Ownership

13.3% of South Atlantic Bancshares shares are held by institutional investors. Comparatively, 3.8% of Pinnacle Bankshares shares are held by institutional investors. 6.5% of Pinnacle Bankshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

South Atlantic Bancshares has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500. Comparatively, Pinnacle Bankshares has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500.

Profitability

This table compares South Atlantic Bancshares and Pinnacle Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
South Atlantic Bancshares	N/A	N/A	N/A
Pinnacle Bankshares	19.32%	13.24%	1.10%

Summary

Pinnacle Bankshares beats South Atlantic Bancshares on 8 of the 14 factors compared between the two stocks.

About South Atlantic Bancshares

South Atlantic Bancshares, Inc. operates as the bank holding company for South Atlantic Bank that provides consumer and commercial banking products and services to individuals, small businesses, and corporations in South Carolina. The company offers checking, money market, and saving accounts, as well as certificate of deposit, individual retirement, and health saving accounts; personal, auto, and recreation loans, as well as home equity and ready reserve overdraft line of credits, and commercial lending products; and credit cards. It also provides cash management and merchant card services; remote deposit capture and automated clearing house services; online, mobile, and telephone banking services; personal and business checks; mortgage products and services; and wealth management services. The company operates offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, and Beaufort, South Carolina. South Atlantic Bancshares, Inc. was founded in 2007 and is headquartered in Myrtle Beach, South Carolina.

About Pinnacle Bankshares

Pinnacle Bankshares Corporation operates as the bank holding company for First National Bank that provides a range of commercial and retail banking products and services. The company accepts checking accounts, savings and time deposits, individual retirement accounts, certificates of deposit, and money market accounts. Its loan products include residential and commercial mortgage loans, home equity loans, consumer installment loans, agricultural loans, investment loans, small business loans, commercial lines of credit, and letters of credit. The company also provides credit cards; insurance products, including property and casualty, life, and health; investment and annuity products; and overdraft protection, merchant bankcard processing, cash management, remote deposit capture, night drop, safe deposit boxes, and notary services, as well as telephone, mobile, and online banking services. It operates branches in Amherst County, Bedford County, Campbell County, Pittsylvania County; and the city of Danville, Lynchburg and Charlottesville. The company was founded in 1908 and is headquartered in Altavista, Virginia.