Critical Contrast: Capital Bancorp (NASDAQ:CBNK) & Western New England Bancorp (NASDAQ:WNEB)

Western New England Bancorp (NASDAQ:WNEB) and Capital Bancorp (NASDAQ:CBNK) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Analyst Ratings

This is a summary of current recommendations and price targets for Western New England Bancorp and Capital Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Western New England Bancorp	0	3	1	0	2.25
Capital Bancorp	0	3	3	0	2.50

Western New England Bancorp presently has a consensus price target of $15.50, suggesting a potential upside of 12.24%. Capital Bancorp has a consensus price target of $37.33, suggesting a potential upside of 2.37%. Given Western New England Bancorp’s higher probable upside, research analysts clearly believe Western New England Bancorp is more favorable than Capital Bancorp.

Profitability

This table compares Western New England Bancorp and Capital Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Western New England Bancorp	12.43%	6.78%	0.61%
Capital Bancorp	17.47%	13.14%	1.46%

Dividends

Western New England Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 2.0%. Capital Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 1.5%. Western New England Bancorp pays out 33.3% of its earnings in the form of a dividend. Capital Bancorp pays out 16.5% 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. Capital Bancorp has raised its dividend for 3 consecutive years.

Volatility & Risk

Western New England Bancorp has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500. Comparatively, Capital Bancorp has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Valuation and Earnings

This table compares Western New England Bancorp and Capital Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Western New England Bancorp	$131.13 million	2.11	$15.27 million	$0.84	16.44
Capital Bancorp	$310.06 million	1.92	$57.17 million	$3.40	10.73

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

Insider & Institutional Ownership

67.9% of Western New England Bancorp shares are held by institutional investors. Comparatively, 56.1% of Capital Bancorp shares are held by institutional investors. 6.6% of Western New England Bancorp shares are held by company insiders. Comparatively, 33.5% of Capital Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Capital Bancorp beats Western New England Bancorp on 11 of the 17 factors compared between the two stocks.

About Western New England Bancorp

Western New England Bancorp, Inc. operates as the holding company for Westfield Bank that provides a range of commercial and retail banking products and services to individuals and businesses. The company accepts various deposit accounts, including interest-bearing and noninterest-bearing checking, commercial checking, business, nonprofit and municipal checking, savings, money market and sweep, individual retirement, and other savings accounts; time deposits; certificates of deposit; and interest on lawyer's trust accounts. It also offers residential real estate loans, including first mortgages, home equity loans, and home equity lines, and secured by one-to-four family residential properties; commercial and industrial loans, such as letters of credit, revolving lines of credit, working capital, equipment financing, and term loans; commercial mortgage loans; construction and land development loans; home equity loans comprising home equity revolving loans and lines of credit; and consumer loans, including automobile, spa and pool, collateral, and personal lines of credit. In addition, the company provides automated teller machine (ATM), telephone and online banking, remote deposit capture, cash management, overdraft and safe deposit facility, and night deposit services. The company was formerly known as Westfield Financial, Inc. and changed its name to Western New England Bancorp, Inc. in October 2016. The company was founded in 1853 and is headquartered in Westfield, Massachusetts.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.