Patriot National Bancorp (NASDAQ: PNBK) and DNB Financial Corp (NASDAQ:DNBF) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, profitability, institutional ownership, dividends, valuation and risk.

Risk & Volatility

Patriot National Bancorp has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, DNB Financial Corp has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500.

Dividends

Patriot National Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. DNB Financial Corp pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. Patriot National Bancorp pays out 3.5% of its earnings in the form of a dividend. DNB Financial Corp pays out 17.0% 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.

Analyst Ratings

This is a breakdown of recent ratings for Patriot National Bancorp and DNB Financial Corp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Patriot National Bancorp 0 0 0 0 N/A
DNB Financial Corp 0 1 0 0 2.00

DNB Financial Corp has a consensus price target of $37.00, suggesting a potential upside of 9.47%. Given DNB Financial Corp’s higher possible upside, analysts plainly believe DNB Financial Corp is more favorable than Patriot National Bancorp.

Earnings & Valuation

This table compares Patriot National Bancorp and DNB Financial Corp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Patriot National Bancorp $23.03 million 2.84 $4.36 million $1.13 15.00
DNB Financial Corp $37.60 million 3.83 $7.03 million $1.65 20.48

DNB Financial Corp has higher revenue and earnings than Patriot National Bancorp. Patriot National Bancorp is trading at a lower price-to-earnings ratio than DNB Financial Corp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Patriot National Bancorp and DNB Financial Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Patriot National Bancorp 14.87% 6.89% 0.59%
DNB Financial Corp 16.38% 7.97% 0.70%

Institutional & Insider Ownership

2.3% of Patriot National Bancorp shares are held by institutional investors. Comparatively, 30.1% of DNB Financial Corp shares are held by institutional investors. 78.6% of Patriot National Bancorp shares are held by insiders. Comparatively, 18.4% of DNB Financial Corp 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.

Summary

DNB Financial Corp beats Patriot National Bancorp on 12 of the 14 factors compared between the two stocks.

About Patriot National Bancorp

Patriot National Bancorp, Inc. is a one-bank holding company for Patriot Bank, N.A. (the Bank), a national banking association. The Bank offers consumer and commercial deposit accounts, such as checking, interest-bearing negotiable order of withdrawal (NOW) account, money market, time certificates of deposit, savings, Certificate of Deposit Account Registry Service (CDARS), individual retirement accounts (IRAs) and health savings accounts (HSAs). The Bank’s other services include automated clearing house (ACH) transfers, lockbox, Internet banking, bill paying, remote deposit capture, debit cards, money orders, traveler’s checks and automated teller machines (ATMs). The Bank offers commercial real estate loans, commercial business loans and various consumer loans to individuals, small and medium-sized businesses, and professionals. Its commercial and industrial loan portfolio consists of commercial business loans and lines of credit to businesses and professionals.

About DNB Financial Corp

DNB Financial Corporation is a bank holding company for DNB First, National Association (the Bank). The Company operates through the Community Banking segment. The Bank is a commercial bank providing a range of services to individuals and small to medium sized businesses in the southeastern Pennsylvania market area, including accepting time, demand and savings deposits, and making secured and unsecured commercial, real estate and consumer loans. In addition, the Bank has over 10 branches and a wealth management group, DNB First Wealth Management. Its loan and lease portfolio consists primarily of commercial and residential real estate loans, commercial loans and lines of credit (including commercial construction), commercial leases and consumer loans. Its investment portfolio includes the United States agency securities, bank stocks, and other bonds and notes. Its primary source of funds is derived from customer deposits, which are typically generated by its branch offices.

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