Financial Survey: Red River Bancshares (NASDAQ:RRBI) vs. American Business Bank (OTCMKTS:AMBZ)

Red River Bancshares (NASDAQ:RRBI) and American Business Bank (OTCMKTS:AMBZ) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.

Volatility & Risk

Red River Bancshares has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, American Business Bank has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Red River Bancshares and American Business Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red River Bancshares	0	0	1	0	3.00
American Business Bank	0	0	0	0	0.00

Red River Bancshares presently has a consensus target price of $67.00, indicating a potential upside of 1.10%. Given Red River Bancshares’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Red River Bancshares is more favorable than American Business Bank.

Earnings & Valuation

This table compares Red River Bancshares and American Business Bank”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red River Bancshares	$157.67 million	2.81	$34.24 million	$5.67	11.69
American Business Bank	$183.26 million	2.48	$43.28 million	$5.18	9.84

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

Insider & Institutional Ownership

27.6% of Red River Bancshares shares are owned by institutional investors. Comparatively, 9.9% of American Business Bank shares are owned by institutional investors. 15.9% of Red River Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Red River Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 0.7%. American Business Bank pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. Red River Bancshares pays out 8.5% of its earnings in the form of a dividend. American Business Bank pays out 19.3% 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. Red River Bancshares has increased its dividend for 3 consecutive years.

Profitability

This table compares Red River Bancshares and American Business Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red River Bancshares	23.62%	11.76%	1.23%
American Business Bank	25.23%	N/A	N/A

Summary

Red River Bancshares beats American Business Bank on 13 of the 17 factors compared between the two stocks.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.

About American Business Bank

American Business Bank, a California-chartered bank, provides banking products and services to small and medium-sized firms, non-profits, business executives, and professionals in Southern California. The company offers credit and depository; treasury management; asset-based lending; SBA lending; international banking comprising money transfers, import and export commercial letters of credit, standby letters of credit, documentary and clean collections, and foreign currency exchange services; and consulting and referral services. It operates regional loan production offices located in North Orange County, Orange County, South Bay, San Fernando Valley, Riverside County, Inland Empire, and Long Beach. American Business Bank was incorporated in 1998 and is headquartered in Los Angeles, California.