Analyzing Parke Bancorp (NASDAQ:PKBK) & Prosperity Bancshares (NYSE:PB)

Prosperity Bancshares (NYSE:PB) and Parke Bancorp (NASDAQ:PKBK) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Insider & Institutional Ownership

80.7% of Prosperity Bancshares shares are owned by institutional investors. Comparatively, 49.7% of Parke Bancorp shares are owned by institutional investors. 4.0% of Prosperity Bancshares shares are owned by company insiders. Comparatively, 13.0% of Parke Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Prosperity Bancshares and Parke Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Prosperity Bancshares	1	8	5	0	2.29
Parke Bancorp	0	0	1	0	3.00

Prosperity Bancshares presently has a consensus target price of $78.36, suggesting a potential upside of 8.28%. Given Prosperity Bancshares’ higher probable upside, research analysts plainly believe Prosperity Bancshares is more favorable than Parke Bancorp.

Dividends

Prosperity Bancshares pays an annual dividend of $2.40 per share and has a dividend yield of 3.3%. Parke Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. Prosperity Bancshares pays out 41.6% 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. Prosperity Bancshares has increased its dividend for 27 consecutive years. Prosperity Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Prosperity Bancshares	29.95%	7.39%	1.43%
Parke Bancorp	29.99%	13.88%	2.05%

Volatility and Risk

Prosperity Bancshares has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Parke Bancorp has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.

Valuation and Earnings

This table compares Prosperity Bancshares and Parke Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Prosperity Bancshares	$1.74 billion	4.20	$542.84 million	$5.77	12.54
Parke Bancorp	$146.08 million	2.74	$37.78 million	$3.84	8.86

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

Summary

Prosperity Bancshares beats Parke Bancorp on 11 of the 17 factors compared between the two stocks.

About Prosperity Bancshares

Prosperity Bancshares, Inc. operates as bank holding company for the Prosperity Bank that provides financial products and services to businesses and consumers. It accepts various deposit products, such as demand, savings, money market, and time accounts, as well as and certificates of deposit. The company also offers 1-4 family residential mortgage, commercial real estate and multifamily residential, commercial and industrial, agricultural, and non-real estate agricultural loans, as well as construction, land development, and other land loans; consumer loans, including automobile, recreational vehicle, boat, home improvement, personal, and deposit account collateralized loans; term loans and lines of credit; and consumer durables and home equity loans, as well as loans for working capital, business expansion, and purchase of equipment and machinery. In addition, it provides internet banking, mobile banking, trust and wealth management, retail brokerage, mortgage services, and treasury management, as well as debit and credit cards. The company was incorporated in 1983 and is headquartered in Houston, Texas.

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.