Financial Analysis: Quaint Oak Bancorp (OTCMKTS:QNTO) & Shore Bancshares (NASDAQ:SHBI)

Shore Bancshares (NASDAQ:SHBI) and Quaint Oak Bancorp (OTCMKTS:QNTO) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Dividends

Shore Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 2.6%. Quaint Oak Bancorp pays an annual dividend of $0.16 per share and has a dividend yield of 1.0%. Shore Bancshares pays out 27.0% of its earnings in the form of a dividend. Quaint Oak Bancorp pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Shore Bancshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

59.8% of Shore Bancshares shares are owned by institutional investors. Comparatively, 8.6% of Quaint Oak Bancorp shares are owned by institutional investors. 8.7% of Shore Bancshares shares are owned by company insiders. Comparatively, 27.5% of Quaint Oak Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Shore Bancshares and Quaint Oak Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shore Bancshares	17.36%	11.50%	1.06%
Quaint Oak Bancorp	0.67%	0.62%	0.05%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Shore Bancshares and Quaint Oak Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shore Bancshares	0	2	3	0	2.60
Quaint Oak Bancorp	0	0	0	0	0.00

Shore Bancshares presently has a consensus price target of $20.17, indicating a potential upside of 9.90%. Given Shore Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Shore Bancshares is more favorable than Quaint Oak Bancorp.

Volatility & Risk

Shore Bancshares has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Quaint Oak Bancorp has a beta of -0.08, suggesting that its stock price is 108% less volatile than the S&P 500.

Valuation and Earnings

This table compares Shore Bancshares and Quaint Oak Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shore Bancshares	$342.72 million	1.79	$59.51 million	$1.78	10.31
Quaint Oak Bancorp	$47.79 million	0.87	$320,000.00	$0.12	131.25

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

Summary

Shore Bancshares beats Quaint Oak Bancorp on 14 of the 16 factors compared between the two stocks.

About Shore Bancshares

Shore Bancshares, Inc. operates as a bank holding company for the Shore United Bank, N.A. that provides various commercial and consumer banking products and services to individuals, businesses, and other organizations. It offers checking, savings, overnight investment sweep, and money market accounts; and regular and IRA certificates of deposit, as well as CDARS programs and cash management services. The company also provides commercial loans, such as secured and unsecured loans, working capital loans, lines of credit, term loans, accounts receivable financing, real estate acquisition and development loans, construction loans, and letters of credit; residential real estate construction loans; residential mortgage loans; and loans to consumers, including home equity, automobile, installment, home improvement, and personal lines of credit, as well as other consumer financing products. In addition, it offers trust, asset management, and financial planning services; treasury management services, such as merchant card processing, remote deposit capture, and ACH origination, as well as telephone, mobile, and Internet banking services; safe deposit boxes; debit and credit cards; and automatic teller machine services. Shore Bancshares, Inc. was founded in 1876 and is headquartered in Easton, Maryland.

About Quaint Oak Bancorp

Quaint Oak Bancorp, Inc. operates as the holding company for Quaint Oak Bank that provides banking products and services in Pennsylvania. It offers various deposit products, including money market accounts, certificates of deposit, interest and non-interest-bearing checking accounts for businesses and consumers, and savings accounts. The company also provides residential and commercial mortgage loans, construction loans, commercial business loans, home equity loans, and lines of credit; mortgage banking, real estate sales, title abstract, and insurance services; and multi-state equipment financing services. It serves its customers through offices, as well as correspondence, telephone, and online banking. Quaint Oak Bancorp, Inc. was incorporated in 1926 and is headquartered in Southampton, Pennsylvania.