Carver Bancorp (NASDAQ:CARV) and QNB (OTCMKTS:QNBC) Critical Analysis

QNB (OTCMKTS:QNBC) and Carver Bancorp (NASDAQ:CARV) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Profitability

This table compares QNB and Carver Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
QNB	12.40%	13.96%	0.98%
Carver Bancorp	-34.89%	-171.55%	-1.82%

Analyst Ratings

This is a summary of current recommendations and price targets for QNB and Carver Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
QNB	0	0	0	0	0.00
Carver Bancorp	1	0	0	0	1.00

Insider and Institutional Ownership

0.7% of QNB shares are held by institutional investors. Comparatively, 18.2% of Carver Bancorp shares are held by institutional investors. 13.0% of QNB shares are held by insiders. Comparatively, 1.3% of Carver Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

QNB has a beta of 0.43, indicating that its stock price is 57% less volatile than the S&P 500. Comparatively, Carver Bancorp has a beta of 1.46, indicating that its stock price is 46% more volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
QNB	$99.60 million	2.18	$14.09 million	$3.37	12.91
Carver Bancorp	$22.74 million	0.45	-$13.74 million	($1.36)	-1.19

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

Summary

QNB beats Carver Bancorp on 9 of the 12 factors compared between the two stocks.

About QNB

QNB Corp. operates as the bank holding company for QNB Bank that engages in the provision of commercial and retail banking products, and retail brokerage services. It offers various deposit products, which include demand and savings accounts, such as money market, interest-bearing demand, club, traditional statement savings, and online savings accounts; and time deposits comprising certificates of deposit and individual retirement accounts. The company also provides commercial and industrial loans, commercial and residential real estate loans, construction and land development loans, indirect lease financing, 1-4 family residential mortgage loans, home equity loans and lines of credit, and consumer loans. In addition, it offers retail brokerage and advisory services; credit cards and insurance products; merchant services; ATM and debit card services; and internet and mobile-banking, electronic bill pay, and remote deposit capture services. The company serves other community banks, thrift institutions, credit unions and other non-bank financial organizations, such as mutual fund companies, insurance companies, and brokerage companies. QNB Corp. was founded in 1877 and is based in Quakertown, Pennsylvania.

About Carver Bancorp

Carver Bancorp, Inc. operates as the holding company for Carver Federal Savings Bank that provides consumer and commercial banking services for consumers, businesses, non-profit organizations, and governmental and quasi-governmental agencies primarily in New York. It accepts various deposit products, including demand, savings, and time deposits; passbook and statement accounts, and certificates of deposit; and individual retirement accounts. The company provides lending products, such as one-to-four family residential, multifamily real estate, and commercial real estate lending; and construction, business and small business administration, and consumer and other loans. In addition, it offers other consumer and commercial banking products and services, including debit cards, online account opening and banking, online bill pay, and telephone banking, as well as check cashing, wire transfer, bill payment, reloadable prepaid card, and money order services. Carver Bancorp, Inc. was founded in 1948 and is headquartered in New York, New York.