Reviewing Capital Bancorp (NASDAQ:CBNK) and ECB Bancorp (NASDAQ:ECBK)

Capital Bancorp (NASDAQ:CBNK) and ECB Bancorp (NASDAQ:ECBK) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Insider & Institutional Ownership

56.1% of Capital Bancorp shares are held by institutional investors. Comparatively, 30.3% of ECB Bancorp shares are held by institutional investors. 32.5% of Capital Bancorp shares are held by company insiders. Comparatively, 9.0% of ECB Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Capital Bancorp and ECB Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital Bancorp	0	1	1	0	2.50
ECB Bancorp	0	0	0	0	0.00

Capital Bancorp currently has a consensus target price of $37.00, indicating a potential upside of 7.31%. Given Capital Bancorp’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Capital Bancorp is more favorable than ECB Bancorp.

Profitability

This table compares Capital Bancorp and ECB Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital Bancorp	15.14%	15.54%	1.72%
ECB Bancorp	7.29%	3.17%	0.37%

Volatility & Risk

Capital Bancorp has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, ECB Bancorp has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500.

Valuation & Earnings

This table compares Capital Bancorp and ECB Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital Bancorp	$244.71 million	2.34	$30.97 million	$2.67	12.91
ECB Bancorp	$68.27 million	2.23	$3.99 million	$0.64	26.84

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

Summary

Capital Bancorp beats ECB Bancorp on 13 of the 14 factors compared between the two stocks.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.

About ECB Bancorp

ECB Bancorp, Inc. operating as a holding company for Everett Co-operative Bank that provides various banking products and services. The company accepts various deposit products, including certificate of deposit accounts, IRAs, money market accounts, savings accounts, demand deposit accounts, and interest-bearing and noninterest-bearing checking accounts. It also offers one- to four-family residential real estate, commercial real estate and multifamily real estate, construction and land, commercial, and consumer loans, as well as home equity loans and lines of credit. In addition, the company invests in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities, and corporate bonds. ECB Bancorp, Inc. was founded in 1890 and is based in Everett, Massachusetts.