Critical Contrast: DNB Financial (DNBF) vs. Southern First Bancshares (NASDAQ:SFST)

Southern First Bancshares (NASDAQ:SFST) and DNB Financial (NASDAQ:DNBF) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Profitability

This table compares Southern First Bancshares and DNB Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Southern First Bancshares 21.88% 11.13% 1.02%
DNB Financial 15.92% 9.42% 0.89%

Dividends

DNB Financial pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. Southern First Bancshares does not pay a dividend. DNB Financial pays out 12.3% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Southern First Bancshares and DNB Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southern First Bancshares $70.55 million 4.05 $13.04 million $1.76 21.85
DNB Financial $48.40 million 3.29 $7.94 million $2.28 16.23

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

Risk & Volatility

Southern First Bancshares has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, DNB Financial has a beta of 0.2, indicating that its stock price is 80% less volatile than the S&P 500.

Insider & Institutional Ownership

69.4% of Southern First Bancshares shares are held by institutional investors. Comparatively, 31.1% of DNB Financial shares are held by institutional investors. 10.9% of Southern First Bancshares shares are held by company insiders. Comparatively, 13.5% of DNB Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Southern First Bancshares and DNB Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southern First Bancshares 0 1 1 0 2.50
DNB Financial 0 0 0 0 N/A

Summary

Southern First Bancshares beats DNB Financial on 11 of the 14 factors compared between the two stocks.

About Southern First Bancshares

Southern First Bancshares, Inc. operates as the bank holding company for Southern First Bank that provides various banking products and services to general public in South Carolina, North Carolina, and Georgia. It accepts various deposit products that include checking accounts, commercial checking accounts, savings accounts, and other time deposits, including daily money market accounts and certificates of deposit. The company's loan portfolio comprises commercial real estate loans; construction real estate loans; commercial business loans for various lines of businesses, such as the manufacturing, service industry, and professional service areas; consumer real estate and home equity loans; and other consumer loans, including secured and unsecured installment loans and revolving lines of credit. In addition, it provides other bank services, such as Internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment, and mobile banking services. The company operates through nine retail offices located in Greenville, Columbia, and Charleston; one located in Raleigh; and one located in Atlanta. Southern First Bancshares, Inc. was founded in 1999 and is headquartered in Greenville, South Carolina.

About DNB Financial

DNB Financial Corporation operates as the bank holding company for DNB First, National Association that provides a range of commercial banking products and services to individuals and small to medium sized businesses. The company offers deposit products, including money market, savings, demand, and NOW accounts; and time deposits, as well as certificates of deposit, including IRAs and brokered deposits. It also provides loan products comprising fixed and variable rate loans; funds for the purchase of business property or ventures, working capital lines, small business administration loans, and lease financing for equipment and for various other purposes; and home equity and home mortgages, as well as term loans for the purchase of consumer goods. In addition, it offers cash management, remote capture, Internet banking, letters of credit, and other lending services, as well as commercial sweep accounts; and various investment and insurance products, such as fixed and variable annuities, 401(k) plans and rollovers, stocks, self-directed and managed IRAs, bonds, mutual funds, brokerage, long term care insurance, 529 college savings plans, life insurance, separately managed investment accounts, disability insurance, and self-employed pension plans. Further, the company provides wealth management and trust services to individuals, businesses, and non-profit organizations; investment and fiduciary services, such as investment management, investment advisory, estate settlement, client bill paying, custody, financial planning, corporate trustee/trust administration, and power of attorney and guardian of the estate capacities; and safekeeping and other depository services, as well as securities brokerage and ATM services. It operates through 15 community offices located in Chester, Delaware, and Philadelphia counties, Pennsylvania. The company was founded in 1860 and is based in Downingtown, Pennsylvania.

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