Head-To-Head Review: Bank of the James Financial Group (NASDAQ:BOTJ) & Eastern Bankshares (NASDAQ:EBC)

Eastern Bankshares (NASDAQ:EBC) and Bank of the James Financial Group (NASDAQ:BOTJ) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Earnings and Valuation

This table compares Eastern Bankshares and Bank of the James Financial Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eastern Bankshares	$1.12 billion	4.39	$88.22 million	$1.76	12.27
Bank of the James Financial Group	$62.51 million	2.00	$9.02 million	$2.53	10.86

Eastern Bankshares has higher revenue and earnings than Bank of the James Financial Group. Bank of the James Financial Group is trading at a lower price-to-earnings ratio than Eastern Bankshares, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Eastern Bankshares and Bank of the James Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastern Bankshares	25.12%	8.71%	1.24%
Bank of the James Financial Group	17.72%	14.30%	1.10%

Dividends

Eastern Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Bank of the James Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.5%. Eastern Bankshares pays out 34.1% of its earnings in the form of a dividend. Bank of the James Financial Group pays out 15.8% 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. Eastern Bankshares has increased its dividend for 5 consecutive years and Bank of the James Financial Group has increased its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of current ratings for Eastern Bankshares and Bank of the James Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eastern Bankshares	0	3	6	0	2.67
Bank of the James Financial Group	0	0	1	0	3.00

Eastern Bankshares presently has a consensus target price of $24.86, suggesting a potential upside of 15.08%. Given Eastern Bankshares’ higher possible upside, equities research analysts plainly believe Eastern Bankshares is more favorable than Bank of the James Financial Group.

Risk and Volatility

Eastern Bankshares has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, Bank of the James Financial Group has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500.

Institutional and Insider Ownership

71.7% of Eastern Bankshares shares are owned by institutional investors. Comparatively, 18.5% of Bank of the James Financial Group shares are owned by institutional investors. 1.3% of Eastern Bankshares shares are owned by company insiders. Comparatively, 11.9% of Bank of the James Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Eastern Bankshares beats Bank of the James Financial Group on 11 of the 16 factors compared between the two stocks.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also provides loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it offers other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company provides mortgage banking; investment advisory services; securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1999 and is headquartered in Lynchburg, Virginia.