Financial Review: Fannie Mae (OTCMKTS:FNMA) and PCB Bancorp (NASDAQ:PCB)

Fannie Mae (OTCMKTS:FNMA) and PCB Bancorp (NASDAQ:PCB) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, earnings, analyst recommendations, valuation, dividends and institutional ownership.

Insider and Institutional Ownership

0.0% of Fannie Mae shares are owned by institutional investors. Comparatively, 33.0% of PCB Bancorp shares are owned by institutional investors. 1.0% of Fannie Mae shares are owned by company insiders. Comparatively, 27.0% of PCB Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Fannie Mae and PCB Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fannie Mae	$159.17 billion	0.04	$14.36 billion	$0.04	152.75
PCB Bancorp	$209.37 million	1.90	$37.45 million	$2.89	9.78

Fannie Mae has higher revenue and earnings than PCB Bancorp. PCB Bancorp is trading at a lower price-to-earnings ratio than Fannie Mae, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Fannie Mae and PCB Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fannie Mae	4.59%	-76.66%	0.51%
PCB Bancorp	19.65%	12.91%	1.24%

Analyst Ratings

This is a summary of current recommendations and price targets for Fannie Mae and PCB Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fannie Mae	1	4	1	1	2.29
PCB Bancorp	0	3	0	1	2.50

Fannie Mae currently has a consensus target price of $12.25, suggesting a potential upside of 100.49%. PCB Bancorp has a consensus target price of $27.75, suggesting a potential downside of 1.79%. Given Fannie Mae’s higher possible upside, research analysts clearly believe Fannie Mae is more favorable than PCB Bancorp.

Volatility and Risk

Fannie Mae has a beta of 1.7, meaning that its share price is 70% more volatile than the S&P 500. Comparatively, PCB Bancorp has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.

Summary

PCB Bancorp beats Fannie Mae on 8 of the 14 factors compared between the two stocks.

About Fannie Mae

Federal National Mortgage Association provides financing solutions for mortgages in the United States. It operates through two segments, Single-Family and Multifamily. The Single-Family segment securitizes and purchases single-family fixed-rate or adjustable-rate, first-lien mortgage loans, or mortgage-related securities backed by these loans; and loans that are insured by Federal Housing Administration, loans guaranteed by the Department of Veterans Affairs and Rural Development Housing and Community Facilities Program of the U.S. Department of Agriculture, manufactured housing mortgage loans, and other mortgage-related securities. The Multifamily segment securitizes multifamily mortgage loans into Fannie Mae mortgage backed securities (MBS); purchases multifamily mortgage loans; and provides credit enhancement for bonds issued by state and local housing finance authorities to finance multifamily housing. This segment also issues structured MBS backed by Fannie Mae multifamily MBS; buys and sells multifamily agency mortgage-backed securities; and invests in low-income housing tax credit multifamily projects. Federal National Mortgage Association was founded in 1938 and is based in Washington, the District of Columbia.

About PCB Bancorp

PCB Bancorp operates as the bank holding company for PCB Bank that provides various banking products and services to small to medium-sized businesses, individuals, and professionals in Southern California. The company offers demand, savings, money market, and time deposits, as well as certificates of deposit; and trade finance, remote deposit capture, courier deposit services, positive pay services, zero balance accounts, and sweep accounts. It also provides real estate loans, including commercial and residential, Small Business Administration (SBA) property, and construction loans; commercial and industrial loans, such as commercial term and lines of credit, SBA commercial term, and SBA Paycheck Protection Program loans; and consumer loans comprising residential mortgage; and automobile loans, unsecured lines of credit, and term loans. In addition, the company offers access to account balances, online transfers, and online bill payment and electronic delivery of customer statements; and mobile banking solutions that include remote check deposit and mobile bill pay. Further, it provides automated teller machines; and banking by telephone, mail, personal appointment, debit cards, direct deposit, and cashier's checks, as well as treasury management, wire transfer, and automated clearing house services. The company operates through a network of full-service branches in Los Angeles and Orange counties, California; Carrollton and Dallas, Texas; and Englewood Cliffs and Palisade Park, New Jersey, and Bayside, New York. It also operates loan production offices in Los Angeles and Orange Counties, California; Annandale, Virginia; Atlanta, Georgia; Bellevue, Washington; Aurora, Colorado; and Carrollton, Texas. The company was formerly known as Pacific City Financial Corporation and changed its name to PCB Bancorp in July 2019. PCB Bancorp was founded in 2003 and is headquartered in Los Angeles, California.