Critical Contrast: Enterprise Bancorp (NASDAQ:EBTC) vs. Cambridge Bancorp (NASDAQ:CATC)
Bancorp Company (NASDAQ: EBTC – Get a rating) and Cambridge Bancorp (NASDAQ: CATC – Get a rating) are both small cap finance companies, but which is the better company? We’ll compare the two companies based on valuation strength, risk, dividends, analyst recommendations, profitability, institutional ownership and earnings.
Enterprise Bancorp pays an annual dividend of $0.82 per share and has a dividend yield of 2.4%. Cambridge Bancorp pays an annual dividend of $2.56 per share and has a dividend yield of 3.1%. Enterprise Bancorp pays 23.6% of its profits as a dividend. Cambridge Bancorp pays 33.5% of its profits as a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings over the next few years. Enterprise Bancorp has increased its dividend for 16 consecutive years and Cambridge Bancorp has increased its dividend for 25 consecutive years. Cambridge Bancorp is clearly the better dividend-paying stock, given its higher yield and longer track record of dividend growth.
Institutional and insider ownership
25.5% of Enterprise Bancorp shares are held by institutional investors. By comparison, 52.8% of Cambridge Bancorp’s shares are held by institutional investors. 16.8% of Enterprise Bancorp shares are held by insiders. By comparison, 3.2% of Cambridge Bancorp’s shares are held by insiders. Strong institutional ownership indicates that large money managers, endowments, and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of recent ratings and price targets for Enterprise Bancorp and Cambridge Bancorp, as provided by MarketBeat.com.
|Sales Ratings||Hold odds||Buy reviews||Strong buy odds||Rating|
|Bancorp Company||0||0||0||0||N / A|
Cambridge Bancorp has a consensus price target of $96.75, suggesting a potential upside of 18.60%. Given Cambridge Bancorp’s possible higher upside, analysts clearly believe that Cambridge Bancorp is more favorable than Enterprise Bancorp.
Volatility and risk
Enterprise Bancorp has a beta of 0.55, meaning its stock price is 45% less volatile than the S&P 500. By comparison, Cambridge Bancorp has a beta of 0.52, meaning its stock price is 48% less volatile than the S&P 500.
Valuation and benefits
This chart compares the gross earnings, earnings per share (EPS), and valuation of Enterprise Bancorp and Cambridge Bancorp.
|Gross revenue||Price/sales ratio||Net revenue||Earnings per share||Price/earnings ratio|
|Bancorp Company||$167.14 million||2.43||$42.17 million||$3.48||9.69|
|Cambridge Bancorp||$177.84 million||3.21||$54.02 million||$7.64||10.68|
Cambridge Bancorp has higher revenue and profit than Enterprise Bancorp. Enterprise Bancorp trades at a lower price-to-earnings ratio than Cambridge Bancorp, indicating that it is currently the more affordable of the two stocks.
This table compares the net margins, return on equity and return on assets of Enterprise Bancorp and Cambridge Bancorp.
|Net margins||Return on equity||return on assets|
Cambridge Bancorp beats Enterprise Bancorp on 13 out of 16 factors compared between the two stocks.
Enterprise Bancorp Company Profile (Get a rating)
Enterprise Bancorp, Inc. operates as a holding company of Enterprise Bank and Trust Company which provides commercial banking products and services. It offers commercial and retail deposit products, including checking accounts, limited transaction savings and money market accounts, commercial swipe products and term deposit certificates. The Company also offers commercial real estate, commercial and industrial, commercial construction, residential and consumer loans, as well as home equity loans and lines of credit. Additionally, the company offers cash management services; advisory and wealth management services featuring personalized investment and trust management services for individuals, family groups, business enterprises, trusts, foundations, non-profit organizations and endowments; brokerage and management services to individual investors; insurance services; and voice, online and mobile banking. As of January 27, 2022, it had 26 full-service branches located in the Massachusetts communities of Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Lawrence, Leominster, Lexington, Lowell, Methuen, North Andover, Tewksbury, Tyngsborough, and Westford ; and in the New Hampshire communities of Derry, Hudson, Nashua, Pelham, Salem and Windham. The company was founded in 1989 and is based in Lowell, Massachusetts.
Cambridge Bancorp Company Profile (Get a rating)
Cambridge Bancorp operates as a bank holding company for Cambridge Trust Company which provides corporate and personal banking services, as well as investment management and trust services. The company accepts various deposits, such as individual checking, savings, money market, trust and retirement accounts; and term and demand deposits, and certificates of deposit. Its lending products include residential and commercial real estate loans; home equity lines of credit and term loans; commercial and industrial loans; secured and unsecured loans, lines of credit and personal installment loans; and ready for construction. The company also offers cash management, online and mobile banking, and payment services. It serves commercial enterprises, non-profit organizations and individuals. The company operates through a network of 19 banking offices in eastern Massachusetts and New Hampshire; and two wealth management offices located in Massachusetts, as well as three wealth management offices located in New Hampshire. Cambridge Bancorp was founded in 1890 and is headquartered in Cambridge, Massachusetts.
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