Reviewing Eastern Bankshares (NASDAQ:EBC) & Bank of the James Financial Group (NASDAQ:BOTJ)

Bank of the James Financial Group (NASDAQ:BOTJ) and Eastern Bankshares (NASDAQ:EBC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Risk and Volatility

Bank of the James Financial Group has a beta of 0.18, suggesting that its share price is 82% less volatile than the S&P 500. Comparatively, Eastern Bankshares has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.

Dividends

Bank of the James Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Eastern Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Bank of the James Financial Group pays out 15.8% of its earnings in the form of a dividend. Eastern Bankshares pays out 34.1% 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. Bank of the James Financial Group has increased its dividend for 5 consecutive years and Eastern Bankshares has increased its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Bank of the James Financial Group and Eastern Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of the James Financial Group	0	0	1	0	3.00
Eastern Bankshares	0	3	6	0	2.67

Eastern Bankshares has a consensus price target of $24.86, suggesting a potential upside of 15.08%. Given Eastern Bankshares’ higher probable upside, analysts clearly believe Eastern Bankshares is more favorable than Bank of the James Financial Group.

Earnings & Valuation

This table compares Bank of the James Financial Group and Eastern Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of the James Financial Group	$62.51 million	2.00	$9.02 million	$2.53	10.86
Eastern Bankshares	$1.12 billion	4.39	$88.22 million	$1.76	12.27

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

Profitability

This table compares Bank of the James Financial Group and Eastern Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of the James Financial Group	17.72%	14.30%	1.10%
Eastern Bankshares	25.12%	8.71%	1.24%

Insider & Institutional Ownership

18.5% of Bank of the James Financial Group shares are held by institutional investors. Comparatively, 71.7% of Eastern Bankshares shares are held by institutional investors. 11.9% of Bank of the James Financial Group shares are held by insiders. Comparatively, 1.3% of Eastern Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Eastern Bankshares beats Bank of the James Financial Group on 11 of the 16 factors compared between the two stocks.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also provides loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it offers other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company provides mortgage banking; investment advisory services; securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1999 and is headquartered in Lynchburg, Virginia.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.