Reviewing SR Bancorp (NASDAQ:SRBK) & Bay Commercial Bank (NASDAQ:BCML)

Bay Commercial Bank (NASDAQ:BCML) and SR Bancorp (NASDAQ:SRBK) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Earnings and Valuation

This table compares Bay Commercial Bank and SR Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bay Commercial Bank	$141.48 million	2.40	$23.93 million	$0.84	36.95
SR Bancorp	$51.80 million	2.88	$3.35 million	$0.51	36.92

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

Analyst Ratings

This is a breakdown of recent ratings for Bay Commercial Bank and SR Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bay Commercial Bank	0	3	1	1	2.60
SR Bancorp	0	2	0	0	2.00

Bay Commercial Bank presently has a consensus price target of $34.00, suggesting a potential upside of 9.54%. SR Bancorp has a consensus price target of $19.00, suggesting a potential upside of 0.90%. Given Bay Commercial Bank’s stronger consensus rating and higher probable upside, equities analysts plainly believe Bay Commercial Bank is more favorable than SR Bancorp.

Dividends

Bay Commercial Bank pays an annual dividend of $1.20 per share and has a dividend yield of 3.9%. SR Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Bay Commercial Bank pays out 142.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SR Bancorp pays out 47.1% of its earnings in the form of a dividend. Bay Commercial Bank has increased its dividend for 3 consecutive years. Bay Commercial Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Bay Commercial Bank and SR Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bay Commercial Bank	6.53%	7.54%	0.98%
SR Bancorp	6.95%	1.82%	0.29%

Volatility & Risk

Bay Commercial Bank has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, SR Bancorp has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Institutional and Insider Ownership

66.2% of Bay Commercial Bank shares are held by institutional investors. Comparatively, 24.7% of SR Bancorp shares are held by institutional investors. 2.9% of Bay Commercial Bank shares are held by insiders. Comparatively, 9.9% of SR Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Bay Commercial Bank beats SR Bancorp on 13 of the 18 factors compared between the two stocks.

About Bay Commercial Bank

BayCom Corp (NASDAQ: BCML) is a bank holding company that provides commercial banking services through its subsidiary, United Business Bank. The bank serves businesses, professionals and individuals, with a focus on small and midsize businesses. Its offerings include business and personal deposit accounts, commercial real estate and business loans, and cash-management services. United Business Bank operates in California and other Western states. The company traces its roots to Bay Commercial Bank, which was established in Walnut Creek, California, in 2004.

About SR Bancorp

SR Bancorp, Inc. is the bank holding company for Somerset Regal Bank, a community bank headquartered in Bound Brook, New Jersey. The bank serves individuals, families and businesses through branches in central and northern New Jersey. Somerset Regal Bank offers deposit accounts and banking services, along with lending products that include residential mortgages, home-equity loans, commercial real estate loans and other business financing. The company was established in connection with the 2023 combination of Somerset Savings Bank and Regal Bank.