Porter Bancorp (NASDAQ: PBIB) and Berkshire Hills Bancorp (NYSE:BHLB) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Valuation & Earnings

This table compares Porter Bancorp and Berkshire Hills Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Porter Bancorp $35.80 million 1.94 -$2.01 million ($0.33) -34.54
Berkshire Hills Bancorp $336.88 million 4.37 $72.74 million $1.82 20.22

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

Dividends

Berkshire Hills Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.3%. Porter Bancorp does not pay a dividend. Berkshire Hills Bancorp pays out 46.2% of its earnings in the form of a dividend. Berkshire Hills Bancorp has raised its dividend for 2 consecutive years.

Profitability

This table compares Porter Bancorp and Berkshire Hills Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Porter Bancorp -4.59% -5.33% -0.20%
Berkshire Hills Bancorp 19.24% 6.67% 0.83%

Insider and Institutional Ownership

17.9% of Porter Bancorp shares are owned by institutional investors. Comparatively, 74.1% of Berkshire Hills Bancorp shares are owned by institutional investors. 28.7% of Porter Bancorp shares are owned by company insiders. Comparatively, 1.7% of Berkshire Hills Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations for Porter Bancorp and Berkshire Hills Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Porter Bancorp 0 0 0 0 N/A
Berkshire Hills Bancorp 0 2 3 0 2.60

Berkshire Hills Bancorp has a consensus price target of $37.90, indicating a potential upside of 2.99%. Given Berkshire Hills Bancorp’s higher possible upside, analysts clearly believe Berkshire Hills Bancorp is more favorable than Porter Bancorp.

Risk and Volatility

Porter Bancorp has a beta of 1.69, meaning that its share price is 69% more volatile than the S&P 500. Comparatively, Berkshire Hills Bancorp has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Summary

Berkshire Hills Bancorp beats Porter Bancorp on 12 of the 15 factors compared between the two stocks.

Porter Bancorp Company Profile

Porter Bancorp, Inc. is a bank holding company. The Company operates through its subsidiary, PBI Bank (the Bank). The Bank is a community bank with a range of commercial and personal banking products. It offers retail and commercial deposit products. It offers drive-in banking facilities, automatic teller machines, night depository, personalized checks, credit cards, debit cards, Internet banking, mobile banking, treasury management services, remote deposit services, electronic funds transfers through automated clearing house services, domestic and foreign wire transfers, cash management, vault services, and loan and deposit sweep accounts. It operates banking offices in approximately 12 counties in Kentucky. Its markets include metropolitan Louisville in Jefferson County and the surrounding counties of Henry and Bullitt. It serves south central Kentucky and southern Kentucky from banking offices in Butler, Green, Hart, Edmonson, Barren, Warren, Ohio and Daviess Counties.

Berkshire Hills Bancorp Company Profile

Berkshire Hills Bancorp, Inc. (Berkshire) is a holding company for Berkshire Bank (the Bank) and Berkshire Insurance Group. Berkshire offers a range of deposit, lending, insurance and wealth management products to retail, commercial, not-for-profit and municipal customers in its market areas. Berkshire product offerings also include retail and commercial electronic banking, commercial cash management and commercial interest rate swaps. The Bank’s loan portfolio consists of commercial loans, which include residential mortgages, commercial real estate, commercial and industrial loans, and consumer loans. The Bank’s securities available for sale include municipal bonds and obligations, mortgage-backed securities, other bonds and obligations, and marketable equity securities. As of December 5, 2016, the Bank had 99 full service branch offices in Massachusetts, New York, Connecticut, Vermont, New Jersey and Pennsylvania.

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