Comparing NB Bancorp (NASDAQ:NBBK) & Capital Bancorp (NASDAQ:CBNK)

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Capital Bancorp and NB Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital Bancorp	0	6	1	0	2.14
NB Bancorp	0	2	2	0	2.50

Capital Bancorp currently has a consensus price target of $41.00, indicating a potential downside of 1.73%. NB Bancorp has a consensus price target of $24.67, indicating a potential upside of 11.46%. Given NB Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe NB Bancorp is more favorable than Capital Bancorp.

Institutional and Insider Ownership

56.1% of Capital Bancorp shares are held by institutional investors. 33.5% of Capital Bancorp shares are held by insiders. Comparatively, 5.1% of NB Bancorp 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.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital Bancorp	$254.37 million	2.67	$57.17 million	$3.31	12.60
NB Bancorp	$351.74 million	2.76	$50.30 million	$1.66	13.33

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

Profitability

This table compares Capital Bancorp and NB Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital Bancorp	16.29%	13.63%	1.49%
NB Bancorp	14.86%	9.75%	1.14%

Dividends

Capital Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 1.3%. NB Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 1.3%. Capital Bancorp pays out 16.9% of its earnings in the form of a dividend. NB Bancorp pays out 16.9% 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. Capital Bancorp has increased its dividend for 3 consecutive years. Capital Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Capital Bancorp beats NB Bancorp on 10 of the 16 factors compared between the two stocks.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.

About NB Bancorp

NB Bancorp, Inc. focuses on operating as a bank holding company for Needham Bank that provides various banking products and services in Greater Boston metropolitan area and surrounding communities in Massachusetts, eastern Connecticut, southern New Hampshire, and Rhode Island. The company offers various deposits, including certificate of deposit, individual retirement, money market, savings, NOW, demand deposit, and interest-bearing and noninterest-bearing checking accounts; and commercial real estate and multifamily, one- to four-family residential real estate, construction and land development, commercial and industrial, and consumer loans, as well as home equity loans and lines of credit. It also invests in securities consisting of U.S. treasury and federal agency securities, government-sponsored residential mortgage-backed securities, municipal bonds, and corporate bonds. The company was founded in 1892 and is based in Needham, Massachusetts.