Financial Review: OptimumBank (NASDAQ:OPHC) versus American Bank (OTCMKTS:AMBK)

OptimumBank (NASDAQ:OPHC) and American Bank (OTCMKTS:AMBK) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, risk, profitability and valuation.

Profitability

This table compares OptimumBank and American Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OptimumBank	19.62%	14.10%	1.31%
American Bank	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for OptimumBank and American Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OptimumBank	0	1	0	0	2.00
American Bank	0	0	0	0	0.00

OptimumBank currently has a consensus price target of $5.25, suggesting a potential upside of 16.93%. Given OptimumBank’s stronger consensus rating and higher possible upside, research analysts plainly believe OptimumBank is more favorable than American Bank.

Earnings & Valuation

This table compares OptimumBank and American Bank”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OptimumBank	$40.98 million	1.29	$6.28 million	$1.33	3.38
American Bank	$40.89 million	2.38	$9.31 million	$1.48	10.03

American Bank has lower revenue, but higher earnings than OptimumBank. OptimumBank is trading at a lower price-to-earnings ratio than American Bank, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

7.4% of OptimumBank shares are held by institutional investors. 13.9% of OptimumBank shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

OptimumBank has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, American Bank has a beta of -0.01, suggesting that its share price is 101% less volatile than the S&P 500.

Summary

OptimumBank beats American Bank on 9 of the 13 factors compared between the two stocks.

About OptimumBank

OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides various consumer and commercial banking services to individuals and businesses. It accepts demand interest-bearing and noninterest-bearing, savings, money market, and NOW accounts, as well as time deposits, wire transfers, ACH services, and certificates of deposit. The company also offers residential and commercial real estate, multi-family real estate, land and construction loans; commercial loans are generally used for working capital purposes or for acquiring equipment, inventory, and furniture; and consumer loans for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, lines of credit, personal, and deposit account collateralized loans. In addition, it provides Visa debit and ATM cards; cash management, notary, and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, and banking by mail, as well as internet banking services. The company was founded in 2000 and is based in Fort Lauderdale, Florida.

About American Bank

American Bank Incorporated operates as the bank holding company for American Bank that provides various banking products and services to consumer, business, institutional, and governmental customers. It accepts a range of interest-bearing checking and money market accounts, savings accounts, certificates of deposit, and individual retirement accounts. The company also offers commercial, industrial, and other loans; commercial mortgage loans; commercial construction loans; residential mortgage loans; and consumer loans, including personal term loans, personal credit lines, automobile loans, home equity loans, and home equity lines of credit and loans. In addition, it provides online or mobile banking, automated teller machine, safe deposit box rental, and wire transfer services, as well as sells checks and checkbooks, and purchases investment securities. The company operates an office located in Allentown, Pennsylvania; and a loan production office in Blue Bell, Pennsylvania. The company was founded in 1997 and is based in Allentown, Pennsylvania.