Peoples Bancorp (NASDAQ:PEBO) and First Business Financial Services (NASDAQ:FBIZ) Head-To-Head Review

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

Institutional & Insider Ownership

60.7% of Peoples Bancorp shares are owned by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are owned by institutional investors. 3.3% of Peoples Bancorp shares are owned by company insiders. Comparatively, 5.0% of First Business Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Peoples Bancorp and First Business Financial Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peoples Bancorp	$618.38 million	1.98	$106.78 million	$3.12	10.94
First Business Financial Services	$279.25 million	1.67	$50.32 million	$5.95	9.42

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

Analyst Ratings

This is a breakdown of recent ratings for Peoples Bancorp and First Business Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peoples Bancorp	0	3	3	0	2.50
First Business Financial Services	0	0	4	0	3.00

Peoples Bancorp currently has a consensus price target of $37.00, suggesting a potential upside of 8.41%. First Business Financial Services has a consensus price target of $67.00, suggesting a potential upside of 19.58%. Given First Business Financial Services’ stronger consensus rating and higher possible upside, analysts clearly believe First Business Financial Services is more favorable than Peoples Bancorp.

Volatility and Risk

Peoples Bancorp has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Dividends

Peoples Bancorp pays an annual dividend of $1.64 per share and has a dividend yield of 4.8%. First Business Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 2.4%. Peoples Bancorp pays out 52.6% of its earnings in the form of a dividend. First Business Financial Services pays out 22.9% 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. Peoples Bancorp has increased its dividend for 10 consecutive years and First Business Financial Services has increased its dividend for 13 consecutive years.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Peoples Bancorp	17.92%	9.82%	1.21%
First Business Financial Services	18.16%	14.83%	1.27%

Summary

First Business Financial Services beats Peoples Bancorp on 11 of the 17 factors compared between the two stocks.

About Peoples Bancorp

Peoples Bancorp Inc. operates as the holding company for Peoples Bank that provides commercial and consumer banking products and services. The company accepts various deposit products, including demand deposit accounts, savings accounts, money market accounts, certificates of deposit, and governmental deposits; and provides commercial and industrial, commercial real estate, construction, finance, residential real estate, and consumer indirect and direct loans, as well as home equity lines of credit and overdrafts. It also offers debit and automated teller machine (ATM) cards; safe deposit rental facilities; money orders and cashier’s checks; and telephone, mobile, and online banking services. In addition, the company provides various life, health, and property and casualty insurance products; third-party insurance administration; interactive teller machines; insurance premium financing; check deposit and alert notification; commercial and technology equipment leasing; fiduciary and trust; underwriting, origination, and servicing of equipment leases, and equipment financing agreements; and asset management and administration services, as well as employee benefit, retirement, and health care plan administration services. Further, it offers brokerage services through an unaffiliated registered broker-dealers; insurance premium finance lending and leasing; and credit cards to individuals and businesses, as well as provides merchant credit card transaction processing, and person-to-person payment processing services. Peoples Bancorp Inc. was founded in 1902 and is headquartered in Marietta, Ohio.

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.