Critical Survey: Pinnacle Bankshares (OTCMKTS:PPBN) and Peoples Financial (OTCMKTS:PFBX)

Profitability

This table compares Peoples Financial and Pinnacle Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Peoples Financial	11.31%	4.06%	0.53%
Pinnacle Bankshares	19.32%	13.24%	1.10%

Insider and Institutional Ownership

32.8% of Peoples Financial shares are held by institutional investors. Comparatively, 3.8% of Pinnacle Bankshares shares are held by institutional investors. 28.1% of Peoples Financial shares are held by insiders. Comparatively, 6.5% of Pinnacle Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility & Risk

Peoples Financial has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500. Comparatively, Pinnacle Bankshares has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500.

Dividends

Peoples Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.6%. Pinnacle Bankshares pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. Peoples Financial pays out 40.9% of its earnings in the form of a dividend. Pinnacle Bankshares pays out 23.0% 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. Pinnacle Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Peoples Financial and Pinnacle Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Peoples Financial	$35.66 million	2.97	$3.91 million	$0.88	26.08
Pinnacle Bankshares	$59.05 million	2.02	$10.77 million	$5.21	10.58

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

Summary

Pinnacle Bankshares beats Peoples Financial on 9 of the 13 factors compared between the two stocks.

About Peoples Financial

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. The company accepts various deposits, such as interest and non-interest-bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). It offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, the company provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, it offers other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and Internet banking services. the company provides services to customers of various industries, such as seafood, retail, hospitality, hotel/motel, gaming, and construction. Peoples Financial Corporation was founded in 1896 and is headquartered in Biloxi, Mississippi.

About Pinnacle Bankshares

Pinnacle Bankshares Corporation operates as the bank holding company for First National Bank that provides a range of commercial and retail banking products and services. The company accepts checking accounts, savings and time deposits, individual retirement accounts, certificates of deposit, and money market accounts. Its loan products include residential and commercial mortgage loans, home equity loans, consumer installment loans, agricultural loans, investment loans, small business loans, commercial lines of credit, and letters of credit. The company also provides credit cards; insurance products, including property and casualty, life, and health; investment and annuity products; and overdraft protection, merchant bankcard processing, cash management, remote deposit capture, night drop, safe deposit boxes, and notary services, as well as telephone, mobile, and online banking services. It operates branches in Amherst County, Bedford County, Campbell County, Pittsylvania County; and the city of Danville, Lynchburg and Charlottesville. The company was founded in 1908 and is headquartered in Altavista, Virginia.