Provident Financial (NASDAQ:PROV) and BBX Capital (OTCMKTS:BBXTB) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.

Volatility & Risk

Provident Financial has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, BBX Capital has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500.

Insider & Institutional Ownership

58.8% of Provident Financial shares are held by institutional investors. 14.4% of Provident Financial shares are held by company insiders. Comparatively, 88.2% of BBX Capital shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Provident Financial and BBX Capital, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Provident Financial 0 1 1 0 2.50
BBX Capital 0 0 0 0 N/A

Provident Financial currently has a consensus price target of $22.00, suggesting a potential upside of 4.02%. Given Provident Financial’s higher possible upside, analysts clearly believe Provident Financial is more favorable than BBX Capital.

Dividends

Provident Financial pays an annual dividend of $0.56 per share and has a dividend yield of 2.6%. BBX Capital pays an annual dividend of $0.05 per share and has a dividend yield of 1.2%. Provident Financial pays out 96.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Provident Financial has increased its dividend for 8 consecutive years. Provident Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Provident Financial and BBX Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Provident Financial 7.76% 3.63% 0.39%
BBX Capital 0.76% 1.83% 0.67%

Valuation & Earnings

This table compares Provident Financial and BBX Capital’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Provident Financial $56.89 million 2.78 $4.42 million $0.58 36.47
BBX Capital $961.79 million 0.44 $35.10 million N/A N/A

BBX Capital has higher revenue and earnings than Provident Financial.

Summary

Provident Financial beats BBX Capital on 9 of the 15 factors compared between the two stocks.

Provident Financial Company Profile

Provident Financial Holdings, Inc. operates as the holding company for Provident Savings Bank, F.S.B. that provides community and mortgage banking services to consumers and small to mid-sized businesses in the Inland Empire region of Southern California. It operates through two segments, Provident Bank and Provident Bank Mortgage. The company's deposit products include checking, savings, and money market accounts, as well as time deposits; and loan portfolio consists of single-family, multi-family, commercial real estate, construction, commercial business, consumer, and other mortgage loans. It also originates, purchases, and sells single-family mortgage loans, including second mortgages and equity lines of credit. In addition, the company offers investment services comprising the sale of investment products, such as annuities and mutual funds; and trustee services for real estate transactions. It operates through 13 full-service banking offices in Riverside County and 1 full-service banking office in San Bernardino County. The company was founded in 1956 and is based in Riverside, California.

BBX Capital Company Profile

BBX Capital Corporation, formerly known as BFC Financial Corporation, is a private equity and venture capital firm specializing in investments and acquisitions of middle market companies. The firm also invests in mergers and acquisition, add-on acquisitions, divestiture, taking public companies private and private companies public, leveraged buyout, partnership, recapitalization, and restructuring. It typically does not invest in industries or companies whose ultimate returns are event driven. The firm seeks to invest across a broad range of industries ranging from service to manufacturing businesses. The firm prefers to acquire controlling interests in its portfolio companies and can also consider minority investments. BFC Financial Corporation was founded in 1980 and is based in Fort Lauderdale, Florida.

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