RBB Bancorp (NASDAQ:RBB – Get Free Report) and Broadway Financial (NASDAQ:BYFC – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.
Institutional & Insider Ownership
40.1% of RBB Bancorp shares are held by institutional investors. Comparatively, 12.1% of Broadway Financial shares are held by institutional investors. 6.8% of RBB Bancorp shares are held by insiders. Comparatively, 3.0% of Broadway Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares RBB Bancorp and Broadway Financial”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| RBB Bancorp | $238.00 million | 1.90 | $31.95 million | $2.43 | 10.99 |
| Broadway Financial | $38.54 million | 2.93 | -$24.80 million | ($2.71) | -4.48 |
RBB Bancorp has higher revenue and earnings than Broadway Financial. Broadway Financial is trading at a lower price-to-earnings ratio than RBB Bancorp, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings for RBB Bancorp and Broadway Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| RBB Bancorp | 0 | 3 | 3 | 0 | 2.50 |
| Broadway Financial | 1 | 0 | 0 | 0 | 1.00 |
RBB Bancorp presently has a consensus target price of $25.50, suggesting a potential downside of 4.49%. Given RBB Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe RBB Bancorp is more favorable than Broadway Financial.
Profitability
This table compares RBB Bancorp and Broadway Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| RBB Bancorp | 17.26% | 7.94% | 0.99% |
| Broadway Financial | -29.36% | 3.49% | 0.28% |
Risk and Volatility
RBB Bancorp has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Broadway Financial has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.
Summary
RBB Bancorp beats Broadway Financial on 13 of the 14 factors compared between the two stocks.
About RBB Bancorp
RBB Bancorp operates as the bank holding company for Royal Business Bank that provides various banking products and services to the Chinese-American, Korean-American, and other Asian-American communities. Its deposit products include checking, savings, and money market accounts, as well as certificates of deposit. The company also offers commercial and industrial lines of credit, term loans, mortgage warehouse lines, and international trade discounts; commercial real estate loans; residential, commercial, and land acquisition and development construction loans; small business administration loans; and single-family residential mortgage loans. In addition, it provides international letters of credit, SWIFT, export advisory, trade finance discount, and foreign exchange services; and remote deposit, e-banking, and mobile banking services. The company serves individuals, businesses, municipalities, and other entities. It operates branches in the Western region with branches in Los Angeles County, California; Orange County, California; Ventura County, California; Clark County, Nevada; Honolulu, Hawaii, as well as in Eastern region with branches in Manhattan, Brooklyn and Queens, New York; Chicago, Illinois; and Edison, New Jersey. RBB Bancorp was founded in 2008 and is headquartered in Los Angeles, California.
About Broadway Financial
Broadway Financial Corporation operates as the holding company for City First Bank, National Association that provides various banking products and services in the United States. It accepts various deposit accounts, including savings accounts, checking accounts, interest checking accounts, money market accounts, and fixed-term certificates of deposit. The company also offers mortgage loans, which are secured by multi-family residential properties; single family residential properties; and commercial real estate, including charter schools, community facilities, and churches, as well as commercial business, construction, and consumer loans. In addition, it invests in securities issued by federal government agencies, residential mortgage-backed securities, and other investments. The company was founded in 1946 and is headquartered in Los Angeles, California.
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