Enterprise Financial Services (NASDAQ:EFSC – Get Free Report) and Dime Community Bancshares (NASDAQ:DCOM – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitability and dividends.
Risk & Volatility
Enterprise Financial Services has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, Dime Community Bancshares has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500.
Dividends
Enterprise Financial Services pays an annual dividend of $1.40 per share and has a dividend yield of 2.2%. Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.4%. Enterprise Financial Services pays out 28.1% of its earnings in the form of a dividend. Dime Community Bancshares pays out 32.5% 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. Enterprise Financial Services has raised its dividend for 11 consecutive years and Dime Community Bancshares has raised its dividend for 2 consecutive years.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Enterprise Financial Services | 0 | 1 | 5 | 1 | 3.00 |
| Dime Community Bancshares | 0 | 2 | 4 | 0 | 2.67 |
Enterprise Financial Services presently has a consensus target price of $69.20, suggesting a potential upside of 10.90%. Dime Community Bancshares has a consensus target price of $45.50, suggesting a potential upside of 7.29%. Given Enterprise Financial Services’ stronger consensus rating and higher possible upside, analysts clearly believe Enterprise Financial Services is more favorable than Dime Community Bancshares.
Earnings and Valuation
This table compares Enterprise Financial Services and Dime Community Bancshares”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Enterprise Financial Services | $1.00 billion | 2.22 | $201.37 million | $4.98 | 12.53 |
| Dime Community Bancshares | $509.18 million | 3.64 | $110.68 million | $3.08 | 13.77 |
Enterprise Financial Services has higher revenue and earnings than Dime Community Bancshares. Enterprise Financial Services is trading at a lower price-to-earnings ratio than Dime Community Bancshares, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Enterprise Financial Services and Dime Community Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Enterprise Financial Services | 18.83% | 9.66% | 1.07% |
| Dime Community Bancshares | 15.15% | 9.12% | 0.83% |
Insider and Institutional Ownership
72.2% of Enterprise Financial Services shares are held by institutional investors. Comparatively, 75.3% of Dime Community Bancshares shares are held by institutional investors. 2.2% of Enterprise Financial Services shares are held by insiders. Comparatively, 7.4% of Dime Community Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Summary
Enterprise Financial Services beats Dime Community Bancshares on 12 of the 18 factors compared between the two stocks.
About Enterprise Financial Services
Enterprise Financial Services Corp. is a bank holding company and the parent of Enterprise Bank & Trust. Founded in 1988, the company is headquartered in Clayton, Missouri, and provides banking and financial services to businesses, professionals and individuals. Through Enterprise Bank & Trust, the company offers commercial and consumer banking, including business and personal deposit accounts, commercial lending, treasury management and cash-management services. It also provides wealth management, trust and investment services.
About Dime Community Bancshares
Dime Community Bancshares, Inc. is the bank holding company for Dime Community Bank, a community bank headquartered in Hauppauge, New York. The bank offers deposit accounts and lending services to individuals, businesses and organizations. Its lending activities include commercial real estate, multifamily, commercial business, residential mortgage and consumer loans. The bank also provides cash management and other banking services to business customers. Dime traces its roots to the Dime Savings Bank of Williamsburgh, founded in Brooklyn in 1864.
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