Financial Review: Potomac Bancshares (OTCMKTS:PTBS) versus Hingham Institution for Savings (NASDAQ:HIFS)

Potomac Bancshares (OTCMKTS:PTBS) and Hingham Institution for Savings (NASDAQ:HIFS) 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, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Volatility and Risk

Potomac Bancshares has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500. Comparatively, Hingham Institution for Savings has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Potomac Bancshares and Hingham Institution for Savings, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Potomac Bancshares	0	0	0	0	0.00
Hingham Institution for Savings	0	1	0	0	2.00

Dividends

Potomac Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.5%. Hingham Institution for Savings pays an annual dividend of $2.52 per share and has a dividend yield of 0.9%. Potomac Bancshares pays out 25.4% of its earnings in the form of a dividend. Hingham Institution for Savings pays out 11.0% 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.

Insider and Institutional Ownership

5.3% of Potomac Bancshares shares are owned by institutional investors. Comparatively, 49.3% of Hingham Institution for Savings shares are owned by institutional investors. 4.4% of Potomac Bancshares shares are owned 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.

Earnings and Valuation

This table compares Potomac Bancshares and Hingham Institution for Savings”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Potomac Bancshares	$54.90 million	1.95	$10.60 million	$2.36	10.08
Hingham Institution for Savings	$236.78 million	2.65	$54.55 million	$22.81	12.62

Hingham Institution for Savings has higher revenue and earnings than Potomac Bancshares. Potomac Bancshares is trading at a lower price-to-earnings ratio than Hingham Institution for Savings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Potomac Bancshares and Hingham Institution for Savings’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Potomac Bancshares	N/A	N/A	N/A
Hingham Institution for Savings	21.17%	7.89%	0.81%

Summary

Hingham Institution for Savings beats Potomac Bancshares on 12 of the 14 factors compared between the two stocks.

About Potomac Bancshares

Potomac Bancshares, Inc. operates as the bank holding company for Bank of Charles Town that provides various banking products and services to individuals and businesses. The company offers checking, savings, and individual retirement accounts; and certificates of deposit (CD). It also provides personal loans, including new and used vehicle, home equity, unsecured home improvement and personal, retail equipment, and lot loans, as well as loans secured by CD, and home equity lines of credit; commercial loans for building or office purchases, commercial real estate and construction, and production and administrative equipment purchases; lines of credit; mortgage, commercial, term, residential and commercial construction, commercial real estate, and agricultural loans; and credit and debit cards. In addition, the company offers Card Pay, cash management, merchant, financial planning, trust and estate, investment management, wealth management, full-service brokerage, retirement and insurance planning and products, asset allocation and management, and college planning services, as well as telephone, mobile, and online banking services. Potomac Bancshares, Inc. was founded in 1871 and is based in Charles Town, West Virginia.

About Hingham Institution for Savings

Hingham Institution for Savings provides various financial products and services to individuals and small businesses in the United States. It offers savings, checking, money market, demand, and negotiable order of withdrawal accounts, as well as certificates of deposit. The company provides commercial and residential real estate, construction, home equity, commercial, consumer, and mortgage loans. In addition, it offers ATMs, debit cards, and Internet-based banking services. The company offers its services through a network of offices in Boston; Washington, D.C.; and San Francisco Bay Area. Hingham Institution for Savings was incorporated in 1834 and is headquartered in Hingham, Massachusetts.