Head-To-Head Contrast: Pacific Mercantile Bancorp (PMBC) & Shore Community Bank (SHRC)

Pacific Mercantile Bancorp (NASDAQ:PMBC) and Shore Community Bank (OTCMKTS:SHRC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.

Dividends

Shore Community Bank pays an annual dividend of $0.30 per share and has a dividend yield of 2.2%. Pacific Mercantile Bancorp does not pay a dividend.

Analyst Ratings

This is a summary of recent ratings and target prices for Pacific Mercantile Bancorp and Shore Community Bank, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pacific Mercantile Bancorp 0 0 2 0 3.00
Shore Community Bank 0 0 0 0 N/A

Pacific Mercantile Bancorp presently has a consensus price target of $11.00, suggesting a potential upside of 45.50%. Given Pacific Mercantile Bancorp’s higher possible upside, research analysts plainly believe Pacific Mercantile Bancorp is more favorable than Shore Community Bank.

Earnings and Valuation

This table compares Pacific Mercantile Bancorp and Shore Community Bank’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Pacific Mercantile Bancorp $55.95 million 2.96 $10.44 million N/A N/A
Shore Community Bank N/A N/A $1.73 million N/A N/A

Pacific Mercantile Bancorp has higher revenue and earnings than Shore Community Bank.

Insider & Institutional Ownership

67.9% of Pacific Mercantile Bancorp shares are held by institutional investors. 4.3% of Pacific Mercantile Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Pacific Mercantile Bancorp and Shore Community Bank’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pacific Mercantile Bancorp 39.50% 20.75% 1.92%
Shore Community Bank N/A N/A N/A

Risk and Volatility

Pacific Mercantile Bancorp has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, Shore Community Bank has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500.

Summary

Pacific Mercantile Bancorp beats Shore Community Bank on 9 of the 12 factors compared between the two stocks.

About Pacific Mercantile Bancorp

Pacific Mercantile Bancorp operates as the holding company for Pacific Mercantile Bank that provides a range of commercial banking products and services to small and medium-size businesses, professional firms, and individuals in Southern California, the United States. The company's deposit products include checking accounts, interest-bearing term deposit accounts, savings and money market deposits, and time deposits. It also offers various loan products, such as commercial loans and credit lines, accounts receivable and inventory financing, small business administration guaranteed business loans, owner-occupied commercial real estate loans, working capital lines of credit and asset based lending, growth capital loans, equipment financing, letters of credit, and corporate credit cards. In addition, the company provides cash and treasury management solutions, automated clearinghouse payment and wire solutions, fraud protection services, remote deposit capture services, courier services, and online banking services; and letters of credit and import/export financing services. As of March 5, 2018, it operated seven offices located in Orange, Los Angeles, San Diego, and San Bernardino counties in Southern California. The company was founded in 1998 and is based in Costa Mesa, California.

About Shore Community Bank

Shore Community Bank, a state chartered bank, provides banking products and services to businesses and individuals in Ocean County, New Jersey. The company's deposit products include checking accounts, savings accounts, certificates of deposit, individual retirement accounts, money market accounts, visa/mastercard merchant deposit accounts, and payroll/direct deposit accounts. Its loan portfolio comprises personal, home equity, term, and demand loans; lines of credit; letters of credit; commercial mortgages; and construction lending. The company also offers direct deposit and electronic transfer, wire transfer, ACH origination, night depository, tenant rent security, signature guarantee, remote deposit, notary, and automated asset management services; safe deposit boxes, escrow accounts, and debit cards, as well as online and telephone banking services. As of April 28, 2016, it operated five banking offices located in Toms River, Jackson, and Manahawkin, New Jersey. Shore Community Bank was incorporated in 1996 and is headquartered in Toms River, New Jersey.

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