Patriot National Bancorp (NASDAQ:PNBK – Get Free Report) and Mercantile Bank (NASDAQ:MBWM – Get Free Report) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.
Risk and Volatility
Patriot National Bancorp has a beta of -0.62, meaning that its stock price is 162% less volatile than the S&P 500. Comparatively, Mercantile Bank has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500.
Institutional and Insider Ownership
39.3% of Patriot National Bancorp shares are held by institutional investors. Comparatively, 58.6% of Mercantile Bank shares are held by institutional investors. 12.8% of Patriot National Bancorp shares are held by company insiders. Comparatively, 2.5% of Mercantile Bank shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Patriot National Bancorp and Mercantile Bank”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Patriot National Bancorp | $58.36 million | 1.73 | -$12.71 million | ($0.07) | -12.14 |
| Mercantile Bank | $371.80 million | 2.83 | $88.75 million | $5.61 | 10.85 |
Mercantile Bank has higher revenue and earnings than Patriot National Bancorp. Patriot National Bancorp is trading at a lower price-to-earnings ratio than Mercantile Bank, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a summary of current recommendations and price targets for Patriot National Bancorp and Mercantile Bank, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Patriot National Bancorp | 1 | 0 | 0 | 0 | 1.00 |
| Mercantile Bank | 0 | 3 | 3 | 0 | 2.50 |
Mercantile Bank has a consensus target price of $62.20, suggesting a potential upside of 2.20%. Given Mercantile Bank’s stronger consensus rating and higher possible upside, analysts clearly believe Mercantile Bank is more favorable than Patriot National Bancorp.
Profitability
This table compares Patriot National Bancorp and Mercantile Bank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Patriot National Bancorp | -9.76% | -7.09% | -0.58% |
| Mercantile Bank | 24.42% | 13.39% | 1.44% |
Summary
Mercantile Bank beats Patriot National Bancorp on 13 of the 14 factors compared between the two stocks.
About Patriot National Bancorp
Patriot National Bancorp, Inc. operates as the holding company for Patriot Bank, N.A. that provides community banking services to individuals, small and medium-sized businesses, and professionals. The company accepts consumer and commercial deposit accounts, such as checking, interest-bearing negotiable order of withdrawal, money market, time certificates of deposit, savings, prepaid deposit, on-line national money market, individual retirement accounts, and health savings accounts, as well as certificate of deposit account registry service. Its loan portfolio comprises commercial real estate, commercial business, small business administration, construction, purchased residential real estate, and various consumer loans. The company also offers automated clearing house transfers, lockbox, internet banking, bill payment, remote deposit capture, debit card, money order, traveler's check, and automatic teller machine services. Patriot National Bancorp, Inc. was founded in 1994 and is headquartered in Stamford, Connecticut.
About Mercantile Bank
Mercantile Bank Corporation operates as the bank holding company for Mercantile Bank of Michigan that provides commercial and retail banking services to small- to medium-sized businesses and individuals in the United States. It accepts various deposit products, including checking, savings, and term certificate accounts; time deposits; and certificates of deposit. The company also provides commercial and industrial loans; vacant land, land development, and residential construction loans; owner and non-owner occupied real estate loans; multi-family and residential rental property loans; single-family residential real estate loans; home equity line of credit programs; and consumer loans, such as new and used automobile and boat loans, and credit cards, as well as overdraft protection services; and residential mortgage and instalment loans. In addition, it offers courier services and safe deposit facilities; and insurance products, such as private passenger automobile, homeowners, personal inland marine, boat owners, recreational vehicle, dwelling fire, umbrella policies, small business, and life insurance products. The company was incorporated in 1997 and is headquartered in Grand Rapids, Michigan.
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