Critical Contrast: Plumas Bancorp (NASDAQ:PLBC) vs. Sound Financial Bancorp (NASDAQ:SFBC)

Plumas Bancorp (NASDAQ:PLBC) and Sound Financial Bancorp (NASDAQ:SFBC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, earnings, dividends, institutional ownership, profitability, analyst recommendations and risk.

Valuation and Earnings

This table compares Plumas Bancorp and Sound Financial Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Plumas Bancorp	$112.17 million	3.42	$29.62 million	$4.72	11.66
Sound Financial Bancorp	$61.52 million	1.78	$7.16 million	$2.93	14.51

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

Dividends

Plumas Bancorp pays an annual dividend of $1.32 per share and has a dividend yield of 2.4%. Sound Financial Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.0%. Plumas Bancorp pays out 28.0% of its earnings in the form of a dividend. Sound Financial Bancorp pays out 28.7% 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. Plumas Bancorp has raised its dividend for 1 consecutive years and Sound Financial Bancorp has raised its dividend for 2 consecutive years. Plumas Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Plumas Bancorp and Sound Financial Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Plumas Bancorp	26.67%	15.16%	1.76%
Sound Financial Bancorp	12.19%	6.99%	0.70%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Plumas Bancorp and Sound Financial Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Plumas Bancorp	0	0	4	0	3.00
Sound Financial Bancorp	0	1	0	0	2.00

Plumas Bancorp presently has a consensus price target of $57.67, indicating a potential upside of 4.79%. Given Plumas Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Plumas Bancorp is more favorable than Sound Financial Bancorp.

Institutional and Insider Ownership

41.7% of Plumas Bancorp shares are held by institutional investors. Comparatively, 68.9% of Sound Financial Bancorp shares are held by institutional investors. 7.4% of Plumas Bancorp shares are held by company insiders. Comparatively, 12.3% of Sound Financial Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Plumas Bancorp has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Sound Financial Bancorp has a beta of 0.02, meaning that its stock price is 98% less volatile than the S&P 500.

Summary

Plumas Bancorp beats Sound Financial Bancorp on 13 of the 17 factors compared between the two stocks.

About Plumas Bancorp

Plumas Bancorp operates as the bank holding company for the Plumas Bank that provides various banking products and services for small and middle market businesses, and individuals in Northeastern California and Northwestern Nevada. The company accepts various deposits, such as checking, money market checking, business sweep, public funds sweep, savings, time deposit, and retirement accounts. Its loan portfolio comprises of term real estate, commercial, and industrial term loans; government-guaranteed and agricultural loans, as well as credit lines; consumer, automobile, and home equity loans; land development and construction loans; and small business administration loans. In addition, the company provides remote deposit, telephone and mobile banking, internet banking with bill-pay options, cashier's check, bank-by-mail, automated teller machine, night depository, safe deposit box, direct deposit, electronic funds transfer, and other customary banking services. Plumas Bancorp was founded in 1980 and is headquartered in Reno, Nevada.

About Sound Financial Bancorp

Sound Financial Bancorp, Inc. operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses. It accepts various deposits products comprising savings, money market deposit, NOW, and demand accounts, as well as certificates of deposit. The company also offers loans secured by first and second mortgages on one-to four-family residences; home equity loans, including fixed-rate loans and variable-rate lines of credit; commercial and multifamily real estate loans; construction loans secured by single-family residences, and commercial and multifamily real estate; land loans; commercial business loans to finance commercial vehicles and equipment, as well as loans secured by accounts receivable and/or inventory; and secured and unsecured consumer loans, such as new and used manufactured homes, floating homes, automobiles, boats, and recreational vehicle loans, and loans secured by deposit accounts. The company was founded in 1953 and is headquartered in Seattle, Washington.