Monarch Financial (MNRK) versus Customers Bancorp (CUBI) Head to Head Review

Monarch Financial (NASDAQ: MNRK) and Customers Bancorp (NYSE:CUBI) are both small-cap banks – nec companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Monarch Financial and Customers Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Monarch Financial 0 0 0 0 N/A
Customers Bancorp 0 3 2 0 2.40

Customers Bancorp has a consensus price target of $40.00, indicating a potential upside of 28.58%. Given Customers Bancorp’s higher possible upside, analysts clearly believe Customers Bancorp is more favorable than Monarch Financial.

Dividends

Monarch Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.9%. Customers Bancorp does not pay a dividend. Monarch Financial pays out 28.6% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Monarch Financial and Customers Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Monarch Financial N/A N/A N/A $1.26 14.67
Customers Bancorp $451.76 million 2.16 $78.83 million $1.97 15.79

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

Volatility & Risk

Monarch Financial has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, Customers Bancorp has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Profitability

This table compares Monarch Financial and Customers Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Monarch Financial 12.93% 13.64% 1.39%
Customers Bancorp 18.64% 14.11% 0.94%

Insider & Institutional Ownership

86.7% of Customers Bancorp shares are owned by institutional investors. 8.7% of Customers Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Customers Bancorp beats Monarch Financial on 10 of the 13 factors compared between the two stocks.

Monarch Financial Company Profile

Monarch Financial Holdings, Inc. (Monarch) is a Virginia-chartered bank holding company. The Company is engaged in commercial and retail banking; investment and insurance sales, and mortgage origination and brokerage. The Company conducts its operations through its subsidiary, Monarch Bank (the Bank), and its two subsidiaries, Monarch Investment, LLC and Monarch Capital, LLC. The Company operates through two segments: community banking (banking) and retail mortgage banking services (mortgage banking). The Company’s community banking segment involves making loans to and generating deposits from individuals and businesses. Monarch’s mortgage banking services consist of originating residential loans and subsequently selling them to investors. Monarch also does business in various markets, such as OBX Bank, Monarch Bank Private Wealth, Monarch Mortgage and under various names through joint ventures with other partners.

Customers Bancorp Company Profile

Customers Bancorp, Inc. (Customers Bancorp) is a bank holding company engaged in banking activities through its subsidiary, Customers Bank (the Bank). The Bank provides financial products and services to small and middle market businesses, not-for-profits, and consumers through its branches and offices in Southeastern Pennsylvania (Bucks, Berks, Chester, Delaware and Philadelphia Counties), Rye Brook, Melville and New York, New York (Westchester, Suffolk and New York Counties), Hamilton, New Jersey (Mercer County), Providence, Rhode Island (Providence County), Portsmouth, New Hampshire (Rockingham County) and Boston, Massachusetts (Suffolk County). The Bank also provides liquidity to the mortgage market nationwide through the operation of its loans to mortgage banking companies. The Bank offers a range of traditional loan and deposit banking products, and financial services. Customers Bank offers a range of lending products.

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