Analyzing Patriot National Bancorp (NASDAQ:PNBK) and OceanFirst Financial (NASDAQ:OCFC)

OceanFirst Financial (NASDAQ:OCFC) and Patriot National Bancorp (NASDAQ:PNBK) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Insider & Institutional Ownership

71.0% of OceanFirst Financial shares are held by institutional investors. Comparatively, 39.3% of Patriot National Bancorp shares are held by institutional investors. 5.4% of OceanFirst Financial shares are held by insiders. Comparatively, 12.8% of Patriot National Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares OceanFirst Financial and Patriot National Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OceanFirst Financial	5.28%	6.16%	0.66%
Patriot National Bancorp	-9.76%	-7.09%	-0.58%

Analyst Recommendations

This is a summary of current ratings for OceanFirst Financial and Patriot National Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OceanFirst Financial	0	4	0	0	2.00
Patriot National Bancorp	1	0	0	0	1.00

OceanFirst Financial presently has a consensus target price of $19.75, suggesting a potential upside of 8.28%. Given OceanFirst Financial’s stronger consensus rating and higher probable upside, equities research analysts clearly believe OceanFirst Financial is more favorable than Patriot National Bancorp.

Volatility & Risk

OceanFirst Financial has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Patriot National Bancorp has a beta of -0.6, indicating that its stock price is 160% less volatile than the S&P 500.

Dividends

OceanFirst Financial pays an annual dividend of $0.80 per share and has a dividend yield of 4.4%. Patriot National Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 4.6%. OceanFirst Financial pays out 111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Patriot National Bancorp pays out -57.1% of its earnings in the form of a dividend. Patriot National Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares OceanFirst Financial and Patriot National Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OceanFirst Financial	$687.16 million	2.57	$70.98 million	$0.72	25.33
Patriot National Bancorp	$38.89 million	2.63	-$12.71 million	($0.07)	-12.30

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

Summary

OceanFirst Financial beats Patriot National Bancorp on 11 of the 15 factors compared between the two stocks.

About OceanFirst Financial

OceanFirst Financial Corp. is the holding company for OceanFirst Bank, a community and regional bank headquartered in Toms River, New Jersey. The bank traces its roots to 1902, when it was established as a local savings institution in Point Pleasant, New Jersey. OceanFirst provides personal and business banking services, including deposit accounts, residential mortgages, commercial real estate and business loans, and cash management services. It also offers related financial services through its banking and wealth management operations.

About Patriot National Bancorp

Patriot National Bancorp, Inc. is the bank holding company for Patriot Bank, N.A., a community-oriented financial institution headquartered in Stamford, Connecticut. The bank serves individuals, families and businesses in its local markets, with a focus on relationship-based banking and personalized service. Patriot Bank offers a range of deposit products, including checking, savings, money market and certificate of deposit accounts. Its lending activities include commercial real estate loans, commercial and industrial financing, residential mortgage loans, home equity products and consumer loans.