Head to Head Review: First Business Financial Services (NASDAQ:FBIZ) vs. Eagle Bancorp Montana (NASDAQ:EBMT)

Eagle Bancorp Montana (NASDAQ:EBMT) and First Business Financial Services (NASDAQ:FBIZ) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitability, institutional ownership, dividends and valuation.

Risk and Volatility

Eagle Bancorp Montana has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Profitability

This table compares Eagle Bancorp Montana and First Business Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Bancorp Montana	10.76%	7.53%	0.64%
First Business Financial Services	18.55%	14.89%	1.24%

Dividends

Eagle Bancorp Montana pays an annual dividend of $0.58 per share and has a dividend yield of 2.9%. First Business Financial Services pays an annual dividend of $1.16 per share and has a dividend yield of 2.1%. Eagle Bancorp Montana pays out 33.7% of its earnings in the form of a dividend. First Business Financial Services pays out 19.1% 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. Eagle Bancorp Montana has raised its dividend for 14 consecutive years and First Business Financial Services has raised its dividend for 13 consecutive years. Eagle Bancorp Montana is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

35.7% of Eagle Bancorp Montana shares are held by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are held by institutional investors. 6.1% of Eagle Bancorp Montana shares are held by company insiders. Comparatively, 5.1% of First Business Financial Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Eagle Bancorp Montana and First Business Financial Services”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Bancorp Montana	$121.99 million	1.29	$9.78 million	$1.72	11.50
First Business Financial Services	$262.38 million	1.76	$44.24 million	$6.08	9.12

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Eagle Bancorp Montana and First Business Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Bancorp Montana	0	0	1	0	3.00
First Business Financial Services	0	0	4	0	3.00

First Business Financial Services has a consensus price target of $60.67, indicating a potential upside of 9.43%. Given First Business Financial Services’ higher possible upside, analysts plainly believe First Business Financial Services is more favorable than Eagle Bancorp Montana.

Summary

First Business Financial Services beats Eagle Bancorp Montana on 12 of the 16 factors compared between the two stocks.

About Eagle Bancorp Montana

Eagle Bancorp Montana, Inc. operates as the bank holding company for Opportunity Bank of Montana that provides various retail banking products and services to small businesses and individuals in Montana. It accepts various deposit products, such as checking, savings, money market, and individual retirement accounts, as well as certificates of deposit accounts. The company also provides 1-4 family residential mortgage loans, such as residential mortgages and construction of residential properties; commercial real estate loans, including multi-family dwellings, nonresidential property, commercial construction and development, and farmland loans; and second mortgage/home equity loans. In addition, it offers consumer loans, such as loans secured by collateral other than real estate, such as automobiles, recreational vehicles, and boats; personal loans and lines of credit; commercial business loans consisting of business loans and lines of credit on a secured and unsecured basis; construction loans; agricultural loans; and mortgage loan services. The company operates full-service branches and automated teller machines. Eagle Bancorp Montana, Inc. was founded in 1922 and is headquartered in Helena, Montana.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.