Head-To-Head Review: QNB (OTCMKTS:QNBC) versus Fidelity D&D Bancorp (NASDAQ:FDBC)

Fidelity D&D Bancorp (NASDAQ:FDBC) and QNB (OTCMKTS:QNBC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of recent ratings for Fidelity D&D Bancorp and QNB, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidelity D&D Bancorp	0	1	0	0	2.00
QNB	0	0	0	0	0.00

Earnings and Valuation

This table compares Fidelity D&D Bancorp and QNB”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidelity D&D Bancorp	$140.40 million	1.95	$28.20 million	$4.87	9.72
QNB	$99.60 million	1.42	$14.09 million	$3.77	10.02

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

Risk and Volatility

Fidelity D&D Bancorp has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, QNB has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Insider and Institutional Ownership

20.1% of Fidelity D&D Bancorp shares are held by institutional investors. Comparatively, 0.7% of QNB shares are held by institutional investors. 21.0% of Fidelity D&D Bancorp shares are held by insiders. Comparatively, 14.5% of QNB shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Fidelity D&D Bancorp pays an annual dividend of $1.72 per share and has a dividend yield of 3.6%. QNB pays an annual dividend of $1.52 per share and has a dividend yield of 4.0%. Fidelity D&D Bancorp pays out 35.3% of its earnings in the form of a dividend. QNB pays out 40.3% 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. Fidelity D&D Bancorp has raised its dividend for 10 consecutive years.

Profitability

This table compares Fidelity D&D Bancorp and QNB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fidelity D&D Bancorp	20.08%	12.84%	1.04%
QNB	14.15%	13.20%	0.80%

Summary

Fidelity D&D Bancorp beats QNB on 12 of the 15 factors compared between the two stocks.

About Fidelity D&D Bancorp

Fidelity D&D Bancorp, Inc. is a holding company, which engages in the provision of commercial banking services. It operates through the following segments: Commercial and Industrial, Commercial Real Estate, Consumer, and Residential Real Estate. The Commercial and Industrial segment refers to identified historic and/or the projected cash flows of the borrower and secondarily to the underlying collateral provided by the borrower. The Commercial Real Estate segment offers finances purchase of real estate, refinance existing obligations, and/or to provide capital. The Consumer segment includes home equity installment loans and lines of credit. The Residential Real Estate segment operates as a secured first lien position of the borrower’s residential real estate. The company was founded in 1902 and is headquartered in Dunmore, PA.

About QNB

QNB Corp. operates as the bank holding company for QNB Bank that engages in the provision of commercial and retail banking products, and retail brokerage services. It offers various deposit products, which include demand and savings accounts, such as money market, interest-bearing demand, club, traditional statement savings, and online savings accounts; and time deposits comprising certificates of deposit and individual retirement accounts. The company also provides commercial and industrial loans, commercial and residential real estate loans, construction and land development loans, indirect lease financing, 1-4 family residential mortgage loans, home equity loans and lines of credit, and consumer loans. In addition, it offers retail brokerage and advisory services; credit cards and insurance products; merchant services; ATM and debit card services; and internet and mobile-banking, electronic bill pay, and remote deposit capture services. The company serves other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies, and brokerage companies. QNB Corp. was founded in 1877 and is based in Quakertown, Pennsylvania.