Head-To-Head Review: Franklin Financial Services (NASDAQ:FRAF) & Provident Bancorp (NASDAQ:PVBC)

Franklin Financial Services (NASDAQ:FRAF) and Provident Bancorp (NASDAQ:PVBC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, earnings, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Franklin Financial Services and Provident Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Franklin Financial Services	0	0	0	0	0.00
Provident Bancorp	0	1	0	0	2.00

Provident Bancorp has a consensus price target of $12.50, suggesting a potential downside of 1.57%. Given Provident Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Provident Bancorp is more favorable than Franklin Financial Services.

Institutional and Insider Ownership

24.8% of Franklin Financial Services shares are owned by institutional investors. Comparatively, 74.6% of Provident Bancorp shares are owned by institutional investors. 6.9% of Franklin Financial Services shares are owned by company insiders. Comparatively, 4.6% of Provident Bancorp shares are owned 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.

Profitability

This table compares Franklin Financial Services and Provident Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Franklin Financial Services	11.78%	9.64%	0.65%
Provident Bancorp	11.26%	4.56%	0.67%

Valuation & Earnings

This table compares Franklin Financial Services and Provident Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Franklin Financial Services	$115.13 million	1.86	$11.10 million	$3.26	14.66
Provident Bancorp	$95.37 million	2.37	$7.27 million	$0.63	20.16

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

Volatility and Risk

Franklin Financial Services has a beta of 0.2, suggesting that its share price is 80% less volatile than the S&P 500. Comparatively, Provident Bancorp has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Summary

Provident Bancorp beats Franklin Financial Services on 7 of the 13 factors compared between the two stocks.

About Franklin Financial Services

Franklin Financial Services Corporation operates as the bank holding company for Farmers and Merchants Trust Company of Chambersburg that provides commercial, retail banking, and trust services to businesses, individuals, governmental entities, and non-profit organizations in Pennsylvania. It offers various deposit products, including checking, savings, money management, and time deposit accounts, as well as demand deposits. The company also provides commercial real estate, construction and land development, commercial and industrial, and residential mortgage loans, as well as installment and revolving loans; consumer loans comprising unsecured personal lines of credit and installment loans; and secured and unsecured commercial and industrial loans, including accounts receivable and inventory financing, and commercial equipment financing. In addition, it offers various investment and trust services comprising estate planning and administration, corporate and personal trust fund management, pension, and profit sharing and other employee benefit funds management services, and custodial services, as well as non-trust related investment services; sells mutual funds, annuities, and insurance products; and offers safe deposit, pension, and fiduciary services. Further, the company engages in non-bank investment activities, such as venture capital investments. The company was founded in 1906 and is headquartered in Chambersburg, Pennsylvania.

About Provident Bancorp

Provident Bancorp, Inc. is a Maryland corporation that was formed in 2019 to be the successor corporation to Provident Bancorp, Inc., a Massachusetts corporation, and the holding company for The Provident Bank. The Provident Bank, a subsidiary of Provident Bancorp, Inc. is an innovative, commercial bank that finds solutions for its business and private clients.