BM Technologies (NYSE:BMTX – Get Rating) and Preferred Bank (NASDAQ:PFBC – Get Rating) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Institutional and Insider Ownership
37.4% of BM Technologies shares are held by institutional investors. Comparatively, 73.2% of Preferred Bank shares are held by institutional investors. 8.6% of BM Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares BM Technologies and Preferred Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| BM Technologies | 26.13% | 45.94% | 19.06% |
| Preferred Bank | 44.96% | 17.38% | 1.69% |
Risk and Volatility
BM Technologies has a beta of -0.06, suggesting that its stock price is 106% less volatile than the S&P 500. Comparatively, Preferred Bank has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and recommmendations for BM Technologies and Preferred Bank, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| BM Technologies | 0 | 0 | 3 | 0 | 3.00 |
| Preferred Bank | 0 | 0 | 5 | 0 | 3.00 |
BM Technologies presently has a consensus target price of $22.00, suggesting a potential upside of 218.84%. Preferred Bank has a consensus target price of $89.60, suggesting a potential upside of 34.15%. Given BM Technologies’ higher probable upside, research analysts plainly believe BM Technologies is more favorable than Preferred Bank.
Valuation and Earnings
This table compares BM Technologies and Preferred Bank’s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| BM Technologies | $94.57 million | 0.89 | $17.58 million | $0.74 | 9.32 |
| Preferred Bank | $218.78 million | 4.59 | $95.24 million | $6.74 | 9.91 |
Preferred Bank has higher revenue and earnings than BM Technologies. BM Technologies is trading at a lower price-to-earnings ratio than Preferred Bank, indicating that it is currently the more affordable of the two stocks.
Summary
Preferred Bank beats BM Technologies on 9 of the 13 factors compared between the two stocks.
About BM Technologies (Get Rating)
BM Technologies, Inc., through its fintech banking platform, provides digital banking and disbursement services to consumers and students in the United States. It facilitates deposits and banking products and services between customers and FDIC-insured partner banks. The company provides access to a suite of banking products, including checking, savings, personal loans, credit cards, and student refinancing. The company was founded in 2014 and is based in Wayne, Pennsylvania.
About Preferred Bank (Get Rating)
Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals in the United States. The company accepts checking, savings, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by retail, industrial, office, special purpose, and residential single and multi-family properties; real estate construction loans; and commercial loans comprising lines of credit for working capital, term loans for capital expenditures, and commercial and stand-by letters of credit; and SBA loans. In addition, the company offers trade finance services, including commercial and export letters of credit, import lines of credit, documentary collections, international wire transfers, acceptances/trust receipt financing products, export financing, documentary collections, and bills purchase programs. Further, it provides various high-wealth banking services to wealthy individuals residing in the Pacific Rim area; and remote deposit capture, and online and mobile banking services. Additionally, the company offers various banking services to physicians, accountants, attorneys, business managers, and other professionals; and safe deposit boxes, account reconciliation, courier service, and cash management services to the manufacturing, service, and distribution companies. As of December 31, 2021, it had eleven full-service branch offices in Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine, Diamond Bar, Pico Rivera, Tarzana, and San Francisco; and one branch in Flushing, New York. The company was incorporated in 1991 and is headquartered in Los Angeles, California.
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