Analyzing Peoples Financial Services (NASDAQ:PFIS) & American Bank (OTCMKTS:AMBK)

Peoples Financial Services (NASDAQ:PFIS) and American Bank (OTCMKTS:AMBK) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, profitability and valuation.

Dividends

Peoples Financial Services pays an annual dividend of $1.64 per share and has a dividend yield of 4.3%. American Bank pays an annual dividend of $0.56 per share and has a dividend yield of 3.5%. Peoples Financial Services pays out 50.3% of its earnings in the form of a dividend. Peoples Financial Services has raised its dividend for 7 consecutive years. Peoples Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Peoples Financial Services and American Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Peoples Financial Services	0	1	0	0	2.00
American Bank	0	0	0	0	N/A

Peoples Financial Services presently has a consensus target price of $43.00, suggesting a potential upside of 12.98%. Given Peoples Financial Services’ higher possible upside, analysts plainly believe Peoples Financial Services is more favorable than American Bank.

Profitability

This table compares Peoples Financial Services and American Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peoples Financial Services	13.81%	7.56%	0.67%
American Bank	N/A	N/A	N/A

Valuation & Earnings

This table compares Peoples Financial Services and American Bank’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peoples Financial Services	$96.91 million	2.77	$27.38 million	$3.26	11.67
American Bank	N/A	N/A	N/A	N/A	N/A

Peoples Financial Services has higher revenue and earnings than American Bank.

Risk and Volatility

Peoples Financial Services has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, American Bank has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.

Insider and Institutional Ownership

31.7% of Peoples Financial Services shares are held by institutional investors. 4.1% of Peoples Financial Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Peoples Financial Services beats American Bank on 10 of the 11 factors compared between the two stocks.

About Peoples Financial Services

Peoples Financial Services Corp. operates as the bank holding company for Peoples Security Bank and Trust Company that provides various commercial and retail banking services. The company accepts money market, negotiable order of withdrawal, savings, individual retirement, demand deposit, and certificates of deposit accounts. It also provides residential real estate, automobile, manufactured housing, personal, and home equity loans; and commercial real estate, working capital, construction, small business administration, and agricultural loans, as well as loans for equipment and other commercial needs, and mineral rights. In addition, the company offers fiduciary and investment services; investment management, IRA trustee, estate administration, living and life insurance trust, trustee under will, guardianship, custodial/IRA custodial, and corporate trust services, as well as pension and profit-sharing plans. Further, it provides wealth management products and services comprising investment portfolio management, estate and business succession planning, annuities, insurance, retirement plan, and tax planning, as well as education funding strategies; and securities, brokerage, and investor services. Additionally, the company offers small business checking and merchant money market accounts, online and telephone banking, business credit cards, merchant line of credit, and financial checkup services; and remote deposit capture, automatic clearing house transaction, cash management, automated teller machine, point of sale transaction, safe deposit box, night depository, direct deposit, and official check services. It serves business, non-profit, governmental, municipal agency, and professional customers, as well as retail customers. Peoples Financial Services Corp. was founded in 1905 and is headquartered in Scranton, Pennsylvania.

About American Bank

American Bank Incorporated operates as the bank holding company for American Bank that provides various banking products and services to consumer, business, institutional, and governmental customers. It accepts a range of interest-bearing checking and money market accounts, savings accounts, certificates of deposit, and individual retirement accounts. The company also offers commercial, industrial, and other loans; commercial mortgage loans; commercial construction loans; residential mortgage loans; and consumer loans, including personal term loans, personal credit lines, automobile loans, home equity loans, and home equity lines of credit and loans. In addition, it provides online or mobile banking, automated teller machine, safe deposit box rental, and wire transfer services, as well as sells checks and checkbooks, and purchases investment securities. The company operates an office located in Allentown, Pennsylvania; and a loan production office in Blue Bell, Pennsylvania. The company was founded in 1997 and is based in Allentown, Pennsylvania.