Analysis of Veritex (NASDAQ:VBTX) and RBB Bancorp (NASDAQ:RBB)

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Veritex (NASDAQ:VBTXGet a rating) and RBB Bancorp (NASDAQ: RBBGet a rating) are both small cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Institutional and Insider Ownership

77.5% of Veritex shares are held by institutional investors. By comparison, 36.3% of RBB Bancorp’s shares are held by institutional investors. 4.7% of Veritex stock is held by company insiders. By comparison, 20.9% of RBB Bancorp’s shares are held by insiders of the company. Strong institutional ownership indicates that endowments, hedge funds, and large fund managers believe a stock will outperform the market over the long term.

Risk and Volatility

Veritex has a beta of 1.49, suggesting its stock price is 49% more volatile than the S&P 500. Comparatively, RBB Bancorp has a beta of 0.88, suggesting its stock price is 12% less volatile than the S&P 500.

Profitability

This table compares the net margins, return on equity and return on assets of Veritex and RBB Bancorp.

Net margins Return on equity return on assets
Veritex 37.12% 10.64% 1.45%
RBB Bancorp 35.39% 12.91% 1.48%

Dividends

Veritex pays an annual dividend of $0.80 per share and has a dividend yield of 2.5%. RBB Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 2.8%. Veritex pays 28.7% of its earnings as a dividend. RBB Bancorp pays 18.9% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Veritex increased its dividend for 2 consecutive years and RBB Bancorp increased its dividend for 2 consecutive years. RBB Bancorp is clearly the better dividend-paying stock, given its higher yield and lower payout ratio.

Valuation and benefits

This chart compares revenue, earnings per share (EPS), and valuation of Veritex and RBB Bancorp.

Gross revenue Price/sales ratio Net revenue Earnings per share Price/earnings ratio
Veritex $374.89 million 4.66 $139.58 million $2.79 11:60 a.m.
RBB Bancorp $165.81 million 2.34 $56.91 million $2.97 6.82

Veritex has higher revenue and profit than RBB Bancorp. RBB Bancorp trades at a lower price-to-earnings ratio than Veritex, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Veritex and RBB Bancorp, as reported by MarketBeat.com.

Sales Ratings Hold odds Buy reviews Strong buy odds Rating
Veritex 0 0 2 1 3.33
RBB Bancorp 1 3 0 0 1.75

Veritex currently has a consensus price target of $46.33, indicating a potential upside of 43.14%. RBB Bancorp has a consensus price target of $27.25, indicating a potential upside of 34.50%. Given Veritex’s stronger consensus rating and higher possible upside, analysts clearly think Veritex is more favorable than RBB Bancorp.

Summary

Veritex beats RBB Bancorp on 11 out of 17 factors compared between the two stocks.

Veritex Company Profile (Get a rating)

Veritex Holdings, Inc. operates as a bank holding company for Veritex Community Bank which provides various commercial banking products and services to small and medium businesses and professionals. The Company accepts deposit products including current, savings, money market and term accounts. Its lending products include Commercial and General Commercial Real Estate, Warehouse Mortgages, Residential Real Estate, Construction and Land, Farmland, Consumer, Paycheck Protection Program, Residential Lending for 1 to 4 families, agricultural, multi-family residential and consumer, as well as in the form of purchased receivables financing. The company also provides interest rate swap services; and a range of online banking solutions, such as access to account balances, online transfers, online bill payment and electronic delivery of customer statements, and ATMs, as well as banking services mobiles, mail and personal appointments. Additionally, it offers debit cards, overnight deposit services, direct deposits, cashiers checks, and letters of credit; cash management services, including balance reporting, inter-account transfers, wire transfer initiation, automated clearing house issuance and chargebacks; and cash management deposit products and services including safe, remote deposit capture, positive payment, reverse positive payment, account reconciliation services, zero balance accounts and transfer accounts . As of December 31, 2021, the company operated 18 full-service branches located in the Dallas-Fort Worth metroplex and 10 full-service branches in the Houston metro area. Veritex Holdings, Inc. was incorporated in 2009 and is headquartered in Dallas, Texas.

RBB Bancorp Company Profile (Get a rating)

RBB Bancorp LogoRBB Bancorp operates as a bank holding company for the Royal Business Bank which provides various banking products and services to the Chinese-American, Korean-American and other Asian-American communities. Its deposit products include checking, savings and money market accounts, as well as certificates of deposit. The company also offers commercial and industrial lines of credit, term loans, mortgage warehouse lines and international trade discounts; commercial real estate loans; residential, commercial and land acquisition and development construction loans; small business administration loans; and single-family residential mortgages. In addition, it provides international letters of credit, SWIFT, export advice, trade finance discounts and foreign exchange services; and remote deposit, online banking and mobile banking services. The Company primarily offers its products and services to individuals, businesses, municipalities and other entities. As of December 31, 2021, it operated 23 branches in the Western Region with branches in Los Angeles County, California; Orange County, California; Ventura County, California; Clark County, Nevada; Honolulu, Hawaii, as well as the Eastern region with branches in Manhattan, Brooklyn and Queens, New York; Chicago, Illinois and Edison, New Jersey. RBB Bancorp was founded in 2008 and is headquartered in Los Angeles, California.



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