Parke Bancorp (NASDAQ:PKBK) vs. FS Bancorp (NASDAQ:FSBW) Critical Survey

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

Risk & Volatility

Parke Bancorp has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, FS Bancorp has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Insider & Institutional Ownership

49.7% of Parke Bancorp shares are owned by institutional investors. Comparatively, 63.9% of FS Bancorp shares are owned by institutional investors. 13.0% of Parke Bancorp shares are owned by company insiders. Comparatively, 12.9% of FS Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Parke Bancorp and FS Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Parke Bancorp	0	0	1	0	3.00
FS Bancorp	1	2	1	0	2.00

FS Bancorp has a consensus price target of $45.00, indicating a potential upside of 2.58%. Given FS Bancorp’s higher possible upside, analysts plainly believe FS Bancorp is more favorable than Parke Bancorp.

Dividends

Parke Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 2.4%. FS Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.6%. Parke Bancorp pays out 20.8% of its earnings in the form of a dividend. FS Bancorp pays out 26.7% 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. FS Bancorp has raised its dividend for 12 consecutive years. FS Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Parke Bancorp	$146.08 million	2.73	$37.78 million	$3.84	8.82
FS Bancorp	$219.52 million	1.48	$33.35 million	$4.34	10.11

Parke Bancorp has higher earnings, but lower revenue than FS Bancorp. Parke Bancorp is trading at a lower price-to-earnings ratio than FS Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Parke Bancorp and FS Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Parke Bancorp	29.99%	13.88%	2.05%
FS Bancorp	14.88%	10.86%	1.05%

About Parke Bancorp

Parke Bancorp, Inc. operates as the bank holding company for Parke Bank that provides personal and business financial services to individuals and small to mid-sized businesses. The company offers various deposit products, including checking, savings, time, money market, and individual retirement accounts, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, construction, commercial and residential real estate mortgage, and consumer loans. In addition, the company provides debit cards, internet banking, and online bill payment services. Parke Bancorp, Inc. was founded in 1999 and is headquartered in Washington Township, New Jersey.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.