Analyzing Freedom Financial (OTCMKTS:FDVA) & VersaBank (NASDAQ:VBNK)

Freedom Financial (OTCMKTS:FDVAGet Rating) and VersaBank (NASDAQ:VBNKGet Rating) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, profitability, risk, institutional ownership and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for Freedom Financial and VersaBank, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Freedom Financial 0 0 0 0 N/A
VersaBank 0 0 0 1 4.00

Earnings & Valuation

This table compares Freedom Financial and VersaBank’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Freedom Financial $41.28 million 2.25 $10.73 million $1.50 9.37
VersaBank $75.30 million 3.06 $17.80 million $0.74 11.34

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

Insider and Institutional Ownership

24.3% of VersaBank shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Freedom Financial and VersaBank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Freedom Financial 27.08% N/A N/A
VersaBank 23.07% 10.16% 1.28%

Summary

VersaBank beats Freedom Financial on 8 of the 10 factors compared between the two stocks.

About Freedom Financial (Get Rating)

Freedom Financial Holdings, Inc. operates as the bank holding company for The Freedom Bank of Virginia that provides commercial banking, personal banking, and mortgage banking solutions. The company offers personal and business checking accounts, interest-bearing business savings accounts, money market accounts, personal savings accounts, certificates of deposits, and IRAs, as well as insured cash sweep and certificate of deposit account registry services. It also provides business term, personal, and mortgage loans; commercial lines of credit; commercial real estate mortgage and small business lending services; home equity lines; and credit cards. In addition, the company offers treasury management, online and mobile banking, remote deposit capture, ACH, wire transfer, and fraud prevention services; business valuation, bank-at-work, and merchant services; and prestige banking services. It operates branch offices in Vienna, Fairfax, Chantilly, Reston, and Manassas, Virginia. The company was founded in 2001 and is based in Fairfax, Virginia.

About VersaBank (Get Rating)

VersaBank, a schedule I chartered bank, provides various banking products and services in Canada. The company offers deposit products, such as guaranteed investment certificates, registered retirement savings plans, daily interest savings accounts, and tax-free savings accounts, as well as deposit insurance products. It also provides lending services, including point of sale financing that involves purchasing loan and lease receivables from finance companies operating in various industries; and commercial banking services comprising commercial real estate, public sector/infrastructure financing, condominium financing, and residential mortgages. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.

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