Head to Head Contrast: Parke Bancorp (NASDAQ:PKBK) versus FS Bancorp (NASDAQ:FSBW)

FS Bancorp (NASDAQ:FSBW) and Parke Bancorp (NASDAQ:PKBK) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares FS Bancorp and Parke Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FS Bancorp	$152.60 million	2.15	$33.35 million	$4.34	10.18
Parke Bancorp	$90.62 million	4.38	$37.78 million	$3.84	8.79

Parke Bancorp has lower revenue, but higher earnings than FS Bancorp. Parke Bancorp is trading at a lower price-to-earnings ratio than FS Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

FS Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.6%. Parke Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. FS Bancorp pays out 26.7% of its earnings in the form of a dividend. Parke Bancorp pays out 20.8% 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. FS Bancorp has increased its dividend for 12 consecutive years. FS Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for FS Bancorp and Parke Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FS Bancorp	1	2	1	0	2.00
Parke Bancorp	0	0	1	0	3.00

FS Bancorp currently has a consensus target price of $45.00, suggesting a potential upside of 1.86%. Given FS Bancorp’s higher probable upside, equities research analysts plainly believe FS Bancorp is more favorable than Parke Bancorp.

Profitability

This table compares FS Bancorp and Parke Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FS Bancorp	14.88%	10.86%	1.05%
Parke Bancorp	29.99%	13.88%	2.05%

Institutional & Insider Ownership

63.9% of FS Bancorp shares are held by institutional investors. Comparatively, 49.7% of Parke Bancorp shares are held by institutional investors. 12.9% of FS Bancorp shares are held by insiders. Comparatively, 13.0% of Parke Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

FS Bancorp has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Parke Bancorp has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.

About Parke Bancorp

Parke Bancorp, Inc. operates as the bank holding company for Parke Bank that provides personal and business financial services to individuals and small to mid-sized businesses. The company offers various deposit products, including checking, savings, time, money market, and individual retirement accounts, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, construction, commercial and residential real estate mortgage, and consumer loans. In addition, the company provides debit cards, internet banking, and online bill payment services. Parke Bancorp, Inc. was founded in 1999 and is headquartered in Washington Township, New Jersey.