Head to Head Review: ECB Bancorp (NASDAQ:ECBK) versus Fannie Mae (OTCMKTS:FNMA)

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

Risk and Volatility

Fannie Mae has a beta of 1.68, meaning that its stock price is 68% more volatile than the S&P 500. Comparatively, ECB Bancorp has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Earnings and Valuation

This table compares Fannie Mae and ECB Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fannie Mae	$159.17 billion	0.02	$14.36 billion	$0.04	85.50
ECB Bancorp	$79.51 million	2.15	$7.77 million	$1.37	14.29

Fannie Mae has higher revenue and earnings than ECB Bancorp. ECB 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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Fannie Mae and ECB Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fannie Mae	1	5	0	0	1.83
ECB Bancorp	0	0	0	1	4.00

Fannie Mae currently has a consensus target price of $8.70, indicating a potential upside of 154.39%. Given Fannie Mae’s higher probable upside, equities analysts clearly believe Fannie Mae is more favorable than ECB Bancorp.

Profitability

This table compares Fannie Mae and ECB 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%
ECB Bancorp	13.19%	6.55%	0.70%

Institutional and Insider Ownership

0.0% of Fannie Mae shares are owned by institutional investors. Comparatively, 30.3% of ECB Bancorp shares are owned by institutional investors. 1.0% of Fannie Mae shares are owned by company insiders. Comparatively, 10.4% of ECB Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

ECB Bancorp beats Fannie Mae on 9 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 ECB Bancorp

ECB Bancorp, Inc. operating as a holding company for Everett Co-operative Bank that provides various banking products and services. The company accepts various deposit products, including certificate of deposit accounts, IRAs, money market accounts, savings accounts, demand deposit accounts, and interest-bearing and noninterest-bearing checking accounts. It also offers one- to four-family residential real estate, commercial real estate and multifamily real estate, construction and land, commercial, and consumer loans, as well as home equity loans and lines of credit. In addition, the company invests in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities, and corporate bonds. ECB Bancorp, Inc. was founded in 1890 and is based in Everett, Massachusetts.