Critical Review: Provident Financial Services (PFS) and BCB Bancorp (BCBP)


Provident Financial Services (NYSE: PFS) and BCB Bancorp (NASDAQ:BCBP) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Risk and Volatility

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Provident Financial Services has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, BCB Bancorp has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.


Valuation & Earnings

This table compares Provident Financial Services and BCB Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Provident Financial Services $379.54 million 5.02 $93.94 million $1.52 18.72
BCB Bancorp $85.05 million 2.71 $9.98 million $0.92 16.63

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

Profitability

This table compares Provident Financial Services and BCB Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Provident Financial Services 25.30% 7.89% 1.06%
BCB Bancorp 13.86% 9.48% 0.75%

Dividends

Provident Financial Services pays an annual dividend of $0.80 per share and has a dividend yield of 2.8%. BCB Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 3.7%. Provident Financial Services pays out 52.6% of its earnings in the form of a dividend. BCB Bancorp pays out 60.9% 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. Provident Financial Services has raised its dividend for 7 consecutive years.


Insider & Institutional Ownership

64.4% of Provident Financial Services shares are held by institutional investors. Comparatively, 32.9% of BCB Bancorp shares are held by institutional investors. 3.0% of Provident Financial Services shares are held by company insiders. Comparatively, 14.4% of BCB Bancorp shares are held by company 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.

Analyst Ratings

This is a summary of recent ratings for Provident Financial Services and BCB Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Provident Financial Services 0 4 2 0 2.33
BCB Bancorp 0 1 1 0 2.50

Provident Financial Services currently has a consensus target price of $28.10, indicating a potential downside of 1.23%. BCB Bancorp has a consensus target price of $14.50, indicating a potential downside of 5.23%. Given Provident Financial Services’ higher probable upside, research analysts plainly believe Provident Financial Services is more favorable than BCB Bancorp.

Summary

Provident Financial Services beats BCB Bancorp on 13 of the 17 factors compared between the two stocks.

Provident Financial Services Company Profile

Provident Financial Services, Inc. operates as the holding company for Provident Bank that provides various banking services to individuals, families, and businesses in the United States. Its deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA and KEOGH accounts. The company's loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, and retail and industrial properties; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, and marine loans. It also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, the company provides trust and estate administrative services; and asset management services comprising investment management, asset allocation, trust and fiduciary, financial and tax planning, family office, estate settlement, and custody services to individuals, municipalities, non-profits, corporations, and pension funds. Further, it sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure, as well as offers investment advisory services. As of December 31, 2017, the company operated 84 full-service branch offices in northern and central New Jersey, as well as in Pennsylvania. Provident Financial Services, Inc. was founded in 1839 and is headquartered in Jersey City, New Jersey.


BCB Bancorp Company Profile

BCB Bancorp, Inc. operates as the holding company for BCB Community Bank, a state chartered commercial bank that provides banking products and services to businesses and individuals in the United States. The company offers deposit products, including savings and club accounts, demand and NOW accounts, interest and non-interest bearing demand accounts, money market accounts, certificates of deposit, individual retirement accounts, and term certificate accounts. It also provides loans, such as commercial and multi-family real estate loans, one-to four-family mortgage loans, home equity loans and home equity lines of credit, construction loans, consumer loans, commercial business loans, and small business administration lending services. In addition, the company offers retail and commercial banking services comprising wire transfers, money orders, safe deposit boxes, night depository services, debit cards, online and mobile banking, gift cards, fraud detection services, and automated teller services. As of December 31, 2017, it operated through 22 branches in Bayonne, Carteret, Colonia, Edison, Hoboken, Fairfield, Holmdel, Jersey City, Lodi, Lyndhurst, Monroe Township, Rutherford, South Orange, Union, and Woodbridge, New Jersey; and 2 branches in Staten Island, New York. BCB Bancorp, Inc. was founded in 2000 and is based in Bayonne, New Jersey.