Critical Analysis: Republic Bancorp (NASDAQ:RBCAA) and Coastal Financial (NASDAQ:CCB)

Coastal Financial (NASDAQ:CCB) and Republic Bancorp (NASDAQ:RBCAA) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Coastal Financial	6.43%	14.98%	1.20%
Republic Bancorp	20.05%	10.60%	1.51%

Valuation and Earnings

This table compares Coastal Financial and Republic Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Coastal Financial	$458.36 million	2.68	$45.22 million	$3.25	27.91
Republic Bancorp	$378.96 million	3.34	$101.37 million	$5.23	12.46

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

Risk and Volatility

Coastal Financial has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500. Comparatively, Republic Bancorp has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500.

Institutional and Insider Ownership

59.2% of Coastal Financial shares are owned by institutional investors. Comparatively, 24.4% of Republic Bancorp shares are owned by institutional investors. 16.8% of Coastal Financial shares are owned by company insiders. Comparatively, 56.6% of Republic Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Coastal Financial and Republic Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Coastal Financial	0	0	3	1	3.25
Republic Bancorp	0	1	0	0	2.00

Coastal Financial presently has a consensus price target of $93.00, suggesting a potential upside of 2.51%. Republic Bancorp has a consensus price target of $70.00, suggesting a potential upside of 7.39%. Given Republic Bancorp’s higher probable upside, analysts clearly believe Republic Bancorp is more favorable than Coastal Financial.

Summary

Coastal Financial beats Republic Bancorp on 8 of the 15 factors compared between the two stocks.

About Coastal Financial

Coastal Financial Corporation operates as the bank holding company for Coastal Community Bank that provides various banking products and services to small and medium-sized businesses, professionals, and individuals in the Puget Sound region in Washington. It accepts a range of deposit products, including demand and savings accounts, time deposits, and money market accounts. The company also offers commercial and industrial loans, such as term loans, commercial lines of credit, capital call lines working capital loans, equipment financing, borrowing base loans, small business administration loans, and other loan products; owner and non-owner-occupied real estate loans, and multi-family residential loans; construction, land, and land development loans; residential real estate loans; and consumer and other loans, including automobile, boat and recreational vehicle, and secured term loans, as well as personal lines of credit, including overdraft protection. In addition, it provides remote deposit capture, online and mobile banking, and direct and reciprocal deposit services; and debit cards. Further, the company offers business accounts and cash management services, including business checking and savings accounts, and treasury services, as well as Banking as a Service (BaaS), a platform that allows broker dealers and digital financial service providers to offer their customers banking services. Coastal Financial Corporation was founded in 1997 and is headquartered in Everett, Washington.

About Republic Bancorp

Republic Bancorp, Inc. operates as a bank holding company for Republic Bank & Trust Company that provides various banking products and services in the United States. It operates in six segments: Traditional Banking, Warehouse, Mortgage Banking, Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions. The company offers demand, money market accounts, savings, individual retirement accounts, time, brokered, and other certificates of deposit; and retail and commercial mortgage, construction and land development, consumer, aircraft, and marine loans. It also provides credit cards; title insurance and other financial products and services; and private banking, lockbox processing, remote deposit capture, business online banking, account reconciliation, automated clearing house processing, and internet and mobile banking services. In addition, it offers short-term and revolving credit facilities to mortgage bankers through mortgage warehouse lines of credit; mortgage banking; tax refund solutions, which facilitate the receipt and payment of federal and state tax refund products through third-party tax preparers and tax-preparation software providers; payments-related products and services to consumers through third party service providers; and consumer credit products. The company offers its services through full-services banking centers in Kentucky, Indiana, Florida, Ohio, and Tennessee. Republic Bancorp, Inc. was incorporated in 1974 and is headquartered in Louisville, Kentucky.