Northpointe Bancshares (NYSE:NPB) vs. RBB Bancorp (NASDAQ:RBB) Critical Analysis

Northpointe Bancshares (NYSE:NPB) and RBB Bancorp (NASDAQ:RBB) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Dividends

Northpointe Bancshares pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. RBB Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.5%. Northpointe Bancshares pays out 5.6% of its earnings in the form of a dividend. RBB Bancorp pays out 24.8% 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.

Institutional & Insider Ownership

40.1% of RBB Bancorp shares are owned by institutional investors. 18.3% of Northpointe Bancshares shares are owned by company insiders. Comparatively, 6.8% of RBB Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Northpointe Bancshares and RBB Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northpointe Bancshares	1	2	2	0	2.20
RBB Bancorp	0	3	2	0	2.40

Northpointe Bancshares presently has a consensus target price of $20.25, suggesting a potential upside of 28.41%. RBB Bancorp has a consensus target price of $29.33, suggesting a potential upside of 14.81%. Given Northpointe Bancshares’ higher possible upside, analysts plainly believe Northpointe Bancshares is more favorable than RBB Bancorp.

Valuation & Earnings

This table compares Northpointe Bancshares and RBB Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northpointe Bancshares	$248.79 million	2.19	$83.41 million	$2.13	7.40
RBB Bancorp	$238.00 million	1.82	$31.95 million	$2.58	9.90

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

Volatility and Risk

Northpointe Bancshares has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500. Comparatively, RBB Bancorp has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Profitability

This table compares Northpointe Bancshares and RBB Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northpointe Bancshares	16.27%	13.88%	1.12%
RBB Bancorp	18.02%	8.35%	1.05%

Summary

Northpointe Bancshares beats RBB Bancorp on 8 of the 15 factors compared between the two stocks.

About Northpointe Bancshares

Northpointe Bancshares, Inc. operates as a bank holding company. It offers a nationwide mortgage purchase program, residential mortgage loans, digital deposit banking to retail customers and custodial deposit services. The company was founded by Charles A. Williams in 1998 and is headquartered in Grand Rapids, MI.

About RBB Bancorp

RBB Bancorp operates as the bank holding company for Royal Business Bank that 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 mortgage loans. In addition, it provides international letters of credit, SWIFT, export advisory, trade finance discount, and foreign exchange services; and remote deposit, e-banking, and mobile banking services. The company serves individuals, businesses, municipalities, and other entities. It operates 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 in 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.