LINKBANCORP (NASDAQ:LNKB) vs. Preferred Bank (NASDAQ:PFBC) Head-To-Head Review

Preferred Bank (NASDAQ:PFBC) and LINKBANCORP (NASDAQ:LNKB) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, earnings, profitability, dividends, analyst recommendations and institutional ownership.

Dividends

Preferred Bank pays an annual dividend of $2.80 per share and has a dividend yield of 3.4%. LINKBANCORP pays an annual dividend of $0.30 per share and has a dividend yield of 4.6%. Preferred Bank pays out 27.0% of its earnings in the form of a dividend. LINKBANCORP pays out -115.4% 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. LINKBANCORP is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current recommendations and price targets for Preferred Bank and LINKBANCORP, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Preferred Bank	0	0	2	0	3.00
LINKBANCORP	0	1	0	0	2.00

Preferred Bank currently has a consensus price target of $100.00, indicating a potential upside of 21.52%. LINKBANCORP has a consensus price target of $7.50, indicating a potential upside of 15.74%. Given Preferred Bank’s stronger consensus rating and higher possible upside, research analysts plainly believe Preferred Bank is more favorable than LINKBANCORP.

Insider and Institutional Ownership

72.8% of Preferred Bank shares are held by institutional investors. Comparatively, 37.5% of LINKBANCORP shares are held by institutional investors. 35.8% of LINKBANCORP shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Preferred Bank has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, LINKBANCORP has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.

Earnings and Valuation

This table compares Preferred Bank and LINKBANCORP’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Preferred Bank	$285.16 million	4.16	$150.04 million	$10.36	7.94
LINKBANCORP	$77.68 million	3.12	-$11.97 million	($0.26)	-24.92

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

Profitability

This table compares Preferred Bank and LINKBANCORP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Preferred Bank	27.35%	20.24%	2.10%
LINKBANCORP	-0.34%	7.06%	0.71%

Summary

Preferred Bank beats LINKBANCORP on 13 of the 16 factors compared between the two stocks.

About Preferred Bank

Preferred Bank provides various commercial banking products and services to small and mid-sized businesses and their owners, entrepreneurs, real estate developers and investors, professionals, and high net worth individuals in the United States. The company accepts checking, savings, and money market deposit accounts; fixed-rate and fixed maturity retail, and non-retail certificates of deposit; and individual retirement accounts. It also provides real estate mortgage loans that are secured by retail, industrial, office, special purpose, and residential single and multi-family properties; real estate construction loans; and commercial loans comprising lines of credit for working capital, term loans for capital expenditures, and commercial and stand-by letters of credit; and SBA loans. In addition, the company offers trade finance services, including commercial and export letters of credit, import lines of credit, documentary collections, international wire transfers, acceptances/trust receipt financing products, export financing, and bills purchase programs. Further, it provides various high-wealth banking services to wealthy individuals residing in the Pacific Rim area; and remote deposit capture, bill pay, treasury management, and internet and mobile banking services. Additionally, the company offers various banking services to physicians, accountants, attorneys, business managers, and other professionals; and safe deposit boxes, account reconciliation, courier service, and cash management services to the manufacturing, service, and distribution companies. The company was incorporated in 1991 and is headquartered in Los Angeles, California.

About LINKBANCORP

LINKBANCORP, Inc. operates as a bank holding company for The Gratz Bank, that provides various banking products and services to individuals, families, nonprofit, and business customers in Pennsylvania. Its deposit products include demand, saving, and money market accounts, as well as certificates of deposits. The company also offers commercial real estate, commercial business, commercial real estate construction, land development, residential real estate, home equity, consumer, agricultural, and municipal loans. It also provides online banking, mobile banking, direct and remote deposit, and cash management services. The company was incorporated in 2018 and is headquartered in Camp Hill, Pennsylvania.