Critical Review: Dime Community Bancshares (NASDAQ:DCOM) versus Catalyst Bancorp (NASDAQ:CLST)

Catalyst Bancorp (NASDAQ:CLST) and Dime Community Bancshares (NASDAQ:DCOM) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, institutional ownership, valuation, profitability, earnings, analyst recommendations and dividends.

Profitability

This table compares Catalyst Bancorp and Dime Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Catalyst Bancorp	13.26%	2.53%	0.74%
Dime Community Bancshares	15.15%	9.12%	0.83%

Earnings & Valuation

This table compares Catalyst Bancorp and Dime Community Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Catalyst Bancorp	$23.69 million	2.86	$2.05 million	$0.56	29.46
Dime Community Bancshares	$730.38 million	1.94	$110.68 million	$2.36	13.64

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

Risk & Volatility

Catalyst Bancorp has a beta of 0.17, indicating that its stock price is 83% less volatile than the S&P 500. Comparatively, Dime Community Bancshares has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Catalyst Bancorp and Dime Community Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Catalyst Bancorp	0	1	0	0	2.00
Dime Community Bancshares	0	2	4	0	2.67

Dime Community Bancshares has a consensus target price of $38.00, suggesting a potential upside of 18.05%. Given Dime Community Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Dime Community Bancshares is more favorable than Catalyst Bancorp.

Institutional and Insider Ownership

33.1% of Catalyst Bancorp shares are held by institutional investors. Comparatively, 75.3% of Dime Community Bancshares shares are held by institutional investors. 5.9% of Catalyst Bancorp shares are held by company insiders. Comparatively, 7.1% of Dime Community Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Dime Community Bancshares beats Catalyst Bancorp on 12 of the 14 factors compared between the two stocks.

About Catalyst Bancorp

Catalyst Bancorp, Inc. operates as a holding company for Catalyst Bank that provides various banking services to individuals and businesses in Louisiana. The company accepts various deposit products, including savings accounts, demand and NOW accounts, money market accounts, and certificates of deposit. It also offers single family residential first mortgage loans, commercial real estate mortgage loans, multi-family residential mortgage loans, commercial and industrial loans, construction and land loans, consumer loans, and other loans. In addition, the company invests in various types of securities comprising mortgage-backed securities, the U.S. treasury obligations, securities of various federal agencies and of state and municipal governments, certificates of deposit at federally insured banks and savings institutions, and federal funds. Catalyst Bancorp, Inc. was founded in 1922 and is headquartered in Opelousas, Louisiana.

About Dime Community Bancshares

Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.