Comparing Towne Bank (NASDAQ:TOWN) and DNB Bank ASA (OTCMKTS:DNBBY)

Towne Bank (NASDAQ:TOWN) and DNB Bank ASA (OTCMKTS:DNBBY) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Earnings & Valuation

This table compares Towne Bank and DNB Bank ASA”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Towne Bank	$1.12 billion	2.50	$169.53 million	$3.56	9.96
DNB Bank ASA	$19.14 billion	2.62	$4.20 billion	$2.80	11.57

DNB Bank ASA has higher revenue and earnings than Towne Bank. Towne Bank is trading at a lower price-to-earnings ratio than DNB Bank ASA, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Towne Bank has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500. Comparatively, DNB Bank ASA has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Insider and Institutional Ownership

56.0% of Towne Bank shares are held by institutional investors. 8.1% of Towne Bank shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Towne Bank and DNB Bank ASA, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Towne Bank	0	2	2	0	2.50
DNB Bank ASA	3	4	1	0	1.75

Towne Bank presently has a consensus target price of $39.50, suggesting a potential upside of 11.36%. Given Towne Bank’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Towne Bank is more favorable than DNB Bank ASA.

Dividends

Towne Bank pays an annual dividend of $1.12 per share and has a dividend yield of 3.2%. DNB Bank ASA pays an annual dividend of $1.42 per share and has a dividend yield of 4.4%. Towne Bank pays out 31.5% of its earnings in the form of a dividend. DNB Bank ASA pays out 50.7% 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. Towne Bank has raised its dividend for 13 consecutive years.

Profitability

This table compares Towne Bank and DNB Bank ASA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Towne Bank	25.64%	9.60%	1.22%
DNB Bank ASA	21.34%	13.97%	1.06%

Summary

Towne Bank beats DNB Bank ASA on 11 of the 17 factors compared between the two stocks.

About Towne Bank

TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals. The company operates through three segments: Banking, Realty, and Insurance. It accepts various deposits, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate acquisition, development, and construction loans. In addition, it provides other services, such as safe deposit boxes, treasury management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as online, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; investment and asset management services; commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options comprising alternative investments, annuities, margin accounts, convertible bonds, and pension and profit-sharing plans. Additionally, it provides residential real estate, relocation, property management, vacation rentals, and title and settlement services; and originates residential mortgage loans. The company also offers life, property, casualty, and vehicle insurance services; and employee benefit programs, such as health, dental, vision, and disability insurance. It operates in Richmond, Virginia, the Greater Hampton Roads region in southeastern Virginia, northeastern North Carolina, Raleigh, Charlotte, Greensboro, and Greenville, North Carolina. TowneBank was incorporated in 1998 and is based in Portsmouth, Virginia.

About DNB Bank ASA

DNB Bank ASA provides financial services for individual and business customers in Norway and internationally. The company offers savings, current, and pension accounts; fixed rate and security deposits; home and cabin mortgages, car and consumer loans, business loans, and refinancing; car, house, home contents, travel, personal, and non-life insurance product; payment services; and online and mobile banking services, as well as cards. It also provides overdraft facilities; leasing services; factoring, supply chain, and receivable purchase financing services; bank guarantee, secure trading, documentary collection, and letter of credit services; investment banking services, such as mergers and acquisition, equity and debt capital market, shares and securities, mutual funds and trading, and bonds and commodities; and private financing, as well as equity trading, foreign exchange, interest rates, and risk advisory services. In addition, the company offers treasury management, working capital, trade finance, auto lease and equipment financing, and corporate finance services, as well as act as an estate agents. DNB Bank ASA was founded in 1822 and is headquartered in Oslo, Norway.