First Business Financial Services (NASDAQ:FBIZ) & ACNB (NASDAQ:ACNB) Critical Contrast

First Business Financial Services (NASDAQ:FBIZ) and ACNB (NASDAQ:ACNB) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, analyst recommendations, valuation and profitability.

Institutional & Insider Ownership

60.1% of First Business Financial Services shares are held by institutional investors. Comparatively, 32.4% of ACNB shares are held by institutional investors. 6.2% of First Business Financial Services shares are held by company insiders. Comparatively, 3.6% of ACNB 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 breakdown of recent recommendations for First Business Financial Services and ACNB, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Business Financial Services	0	0	2	0	3.00
ACNB	0	3	0	0	2.00

First Business Financial Services currently has a consensus target price of $40.33, indicating a potential upside of 16.57%. ACNB has a consensus target price of $42.33, indicating a potential upside of 24.58%. Given ACNB’s higher possible upside, analysts clearly believe ACNB is more favorable than First Business Financial Services.

Dividends

First Business Financial Services pays an annual dividend of $1.00 per share and has a dividend yield of 2.9%. ACNB pays an annual dividend of $1.20 per share and has a dividend yield of 3.5%. First Business Financial Services pays out 23.0% of its earnings in the form of a dividend. ACNB pays out 32.3% 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. First Business Financial Services has increased its dividend for 12 consecutive years and ACNB has increased its dividend for 3 consecutive years.

Volatility & Risk

First Business Financial Services has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, ACNB has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Valuation & Earnings

This table compares First Business Financial Services and ACNB’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Business Financial Services	$226.24 million	1.27	$37.03 million	$4.35	7.95
ACNB	$115.08 million	2.51	$31.69 million	$3.72	9.13

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

Profitability

This table compares First Business Financial Services and ACNB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Business Financial Services	16.37%	13.95%	1.11%
ACNB	27.53%	12.12%	1.32%

Summary

First Business Financial Services beats ACNB on 11 of the 17 factors compared between the two stocks.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.

About ACNB

ACNB Corporation, a financial holding company, offers banking, insurance, and financial services to individual, business, and government customers in the United States. The company provides checking, savings, and money market deposit accounts, as well as time deposits and debit cards. It also offers commercial lending products, such as commercial mortgages, real estate development and construction loans, accounts receivable and inventory financing, and agricultural and governmental loans; consumer lending products, including home equity loans and lines of credit, automobile and recreational vehicle loans, manufactured housing loans, and personal lines of credit; and mortgage lending programs include personal residential mortgages, and residential construction and investment mortgage loans. In addition, the company provides other services that are related to testamentary trusts, life insurance trusts, charitable remainder trusts, guardianships, powers of attorney, custodial accounts, and investment management and advisory accounts; and retail brokerage services. Further, it acts as a trustee to invest in, protect, manage, and distribute financial assets. Additionally, the company offers property and casualty, health, life, and disability insurance products to commercial and personal clients; and online, telephone, and mobile banking, as well as automated teller machine services. ACNB Corporation was founded in 1857 and is headquartered in Gettysburg, Pennsylvania.