Capital Bancorp (NASDAQ:CBNK) & Sandy Spring Bancorp (NASDAQ:SASR) Critical Contrast

Capital Bancorp (NASDAQ:CBNK) and Sandy Spring Bancorp (NASDAQ:SASR) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Earnings and Valuation

This table compares Capital Bancorp and Sandy Spring Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Capital Bancorp $85.25 million 2.07 $12.77 million $1.02 12.63
Sandy Spring Bancorp $385.13 million 3.30 $100.86 million $2.86 12.47

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

Institutional and Insider Ownership

22.0% of Capital Bancorp shares are held by institutional investors. Comparatively, 68.3% of Sandy Spring Bancorp shares are held by institutional investors. 39.4% of Capital Bancorp shares are held by insiders. Comparatively, 2.1% of Sandy Spring Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Capital Bancorp and Sandy Spring Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capital Bancorp 0 1 3 0 2.75
Sandy Spring Bancorp 0 2 3 0 2.60

Capital Bancorp currently has a consensus target price of $14.50, suggesting a potential upside of 12.58%. Sandy Spring Bancorp has a consensus target price of $37.81, suggesting a potential upside of 6.04%. Given Capital Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Capital Bancorp is more favorable than Sandy Spring Bancorp.

Profitability

This table compares Capital Bancorp and Sandy Spring Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Capital Bancorp 15.19% 12.34% 1.27%
Sandy Spring Bancorp 27.80% 10.26% 1.34%

Dividends

Sandy Spring Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 3.4%. Capital Bancorp does not pay a dividend. Sandy Spring Bancorp pays out 42.0% of its earnings in the form of a dividend. Sandy Spring Bancorp has raised its dividend for 8 consecutive years.

Summary

Sandy Spring Bancorp beats Capital Bancorp on 9 of the 15 factors compared between the two stocks.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various commercial banking products and services to businesses, not-for-profit associations, and entrepreneurs in the United States. The company offers a range of deposit products and services, including various checking and savings accounts, certificates of deposit, money market accounts, debit cards, remote deposit capture services, online and mobile banking services, e-statements, and bank-by-mail and direct deposit services, as well as business accounts, and cash and treasury management services. It also provides lending services, such as residential and commercial real estate loans, construction loans, commercial business loans, and credit card lines, as well as loans to individuals comprising secured and unsecured installment and term loans, car loans, and boat loans. In addition, the company originates residential mortgages for sale in the secondary market; and offers short-term secured real estate financing services. It operates through five commercial bank branches, four mortgage offices, one loan production office, a limited service branch, corporate offices, and operations facilities in the greater Washington, D.C. and Baltimore, Maryland markets. The company was incorporated in 1998 and is headquartered in Rockville, Maryland.

About Sandy Spring Bancorp

Sandy Spring Bancorp, Inc. operates as the bank holding company for Sandy Spring Bank that provides commercial banking services to individuals and businesses in central Maryland, Northern Virginia, and Washington D.C. The company operates in three segments: Community Banking, Insurance, and Investment Management. The Community Banking segment provides financial products and services, including various loan and deposit products to individuals and businesses. This segment accepts deposits, such as demand, money market savings, regular savings, and time deposits. Its loan products include residential real estate loans; commercial real estate loans, commercial construction loans, and other commercial loans; and consumer loans comprising home equity loans and lines, installment loans, and personal lines of credit. The Insurance segment provides general insurance agency services and annuities. The Investment Management segment provides comprehensive investment management and financial planning to individuals, families, small businesses, and associations, including cash flow analysis, investment review, tax and retirement planning, insurance analysis, and estate planning. The company also provides mortgage banking, equipment leasing, personal trust, and wealth management services. As of December 31, 2018, it operated 55 community offices and 6 financial centers. Sandy Spring Bancorp, Inc. was founded in 1868 and is headquartered in Olney, Maryland.

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