Reviewing Arrow Financial (NASDAQ:AROW) and Bancorp (NASDAQ:TBBK)

Bancorp (NASDAQ:TBBK) and Arrow Financial (NASDAQ:AROW) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Insider & Institutional Ownership

96.2% of Bancorp shares are owned by institutional investors. Comparatively, 46.7% of Arrow Financial shares are owned by institutional investors. 5.6% of Bancorp shares are owned by insiders. Comparatively, 3.6% of Arrow Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Bancorp and Arrow Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bancorp	$575.31 million	4.07	$217.54 million	$4.43	11.32
Arrow Financial	$144.69 million	2.88	$29.71 million	$1.70	14.69

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

Volatility & Risk

Bancorp has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500. Comparatively, Arrow Financial has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bancorp	30.97%	27.33%	2.66%
Arrow Financial	13.32%	8.59%	0.76%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Bancorp and Arrow Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bancorp	0	1	2	0	2.67
Arrow Financial	0	2	0	0	2.00

Bancorp currently has a consensus target price of $65.33, indicating a potential upside of 30.25%. Arrow Financial has a consensus target price of $30.00, indicating a potential upside of 20.14%. Given Bancorp’s stronger consensus rating and higher possible upside, research analysts plainly believe Bancorp is more favorable than Arrow Financial.

Summary

Bancorp beats Arrow Financial on 13 of the 14 factors compared between the two stocks.

About Bancorp

The Bancorp, Inc. operates as the bank holding company for The Bancorp Bank, National Association that provides banking products and services in the United States. It offers a range of deposit products and services, including checking, savings, time, money market, and commercial accounts; overdrafts; and certificates of deposit. The company also provides securities-backed lines of credit and insurance policy cash value-backed lines of credit; investor advisor financing; lease financing for commercial and government vehicle fleets, including trucks and other special purpose vehicles; commercial real estate bridge loans; and small business administration loans. In addition, it offers bill and other payment services; debit and prepaid card issuing services; card and bill payment, and automated clearing house processing services; and internet banking services. The company was incorporated in 1999 and is headquartered in Wilmington, Delaware.

About Arrow Financial

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and enhancement to commercial properties, as well as commercial construction and land development loans to finance projects. The company’s lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program. Further, the company provides retirement planning, trust, and estate administration services for individuals, as well as pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. It operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.