Towne Bank (NASDAQ:TOWN) versus Republic Bancorp (NASDAQ:RBCAA) Critical Survey

Towne Bank (NASDAQ:TOWN) and Republic Bancorp (NASDAQ:RBCAA) 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.

Profitability

This table compares Towne Bank and Republic Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Towne Bank	17.15%	8.27%	1.03%
Republic Bancorp	22.94%	11.92%	1.73%

Institutional and Insider Ownership

56.0% of Towne Bank shares are owned by institutional investors. Comparatively, 24.4% of Republic Bancorp shares are owned by institutional investors. 8.1% of Towne Bank shares are owned by company insiders. Comparatively, 56.4% of Republic Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Towne Bank pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. Republic Bancorp pays an annual dividend of $1.80 per share and has a dividend yield of 2.5%. Towne Bank pays out 42.4% of its earnings in the form of a dividend. Republic Bancorp pays out 29.7% 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. Towne Bank has raised its dividend for 13 consecutive years and Republic Bancorp has raised its dividend for 27 consecutive years.

Volatility & Risk

Towne Bank has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, Republic Bancorp has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Towne Bank and Republic Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Towne Bank	0	1	2	0	2.67
Republic Bancorp	0	2	0	0	2.00

Towne Bank currently has a consensus target price of $40.00, indicating a potential upside of 16.45%. Republic Bancorp has a consensus target price of $69.00, indicating a potential downside of 5.26%. Given Towne Bank’s stronger consensus rating and higher possible upside, research analysts plainly believe Towne Bank is more favorable than Republic Bancorp.

Valuation & Earnings

This table compares Towne Bank and Republic Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Towne Bank	$1.03 billion	2.51	$161.76 million	$2.36	14.56
Republic Bancorp	$505.64 million	2.81	$101.37 million	$6.07	12.00

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

Summary

Towne Bank beats Republic Bancorp on 9 of the 17 factors compared between the two stocks.

About Towne Bank

TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals. The company operates through three segments: Banking, Realty, and Insurance. It accepts various deposits, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate acquisition, development, and construction loans. In addition, it provides other services, such as safe deposit boxes, treasury management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as online, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; investment and asset management services; commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options comprising alternative investments, annuities, margin accounts, convertible bonds, and pension and profit-sharing plans. Additionally, it provides residential real estate, relocation, property management, vacation rentals, and title and settlement services; and originates residential mortgage loans. The company also offers life, property, casualty, and vehicle insurance services; and employee benefit programs, such as health, dental, vision, and disability insurance. It operates in Richmond, Virginia, the Greater Hampton Roads region in southeastern Virginia, northeastern North Carolina, Raleigh, Charlotte, Greensboro, and Greenville, North Carolina. TowneBank was incorporated in 1998 and is based in Portsmouth, Virginia.

About Republic Bancorp

Republic Bancorp, Inc. operates as a bank holding company for Republic Bank & Trust Company that provides various banking products and services in the United States. It operates in six segments: Traditional Banking, Warehouse, Mortgage Banking, Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions. The company offers demand, money market accounts, savings, individual retirement accounts, time, brokered, and other certificates of deposit; and retail and commercial mortgage, construction and land development, consumer, aircraft, and marine loans. It also provides credit cards; title insurance and other financial products and services; and private banking, lockbox processing, remote deposit capture, business online banking, account reconciliation, automated clearing house processing, and internet and mobile banking services. In addition, it offers short-term and revolving credit facilities to mortgage bankers through mortgage warehouse lines of credit; mortgage banking; tax refund solutions, which facilitate the receipt and payment of federal and state tax refund products through third-party tax preparers and tax-preparation software providers; payments-related products and services to consumers through third party service providers; and consumer credit products. The company offers its services through full-services banking centers in Kentucky, Indiana, Florida, Ohio, and Tennessee. Republic Bancorp, Inc. was incorporated in 1974 and is headquartered in Louisville, Kentucky.