VersaBank (NASDAQ:VBNK – Get Rating) and Avidbank (OTCMKTS:AVBH – Get Rating) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Risk & Volatility

VersaBank has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, Avidbank has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Insider and Institutional Ownership

30.2% of VersaBank shares are held by institutional investors. Comparatively, 10.3% of Avidbank shares are held by institutional investors. 5.3% of VersaBank shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

VersaBank currently has a consensus target price of $9.00, suggesting a potential upside of 15.98%. Avidbank has a consensus target price of $24.00, suggesting a potential upside of 17.65%. Given Avidbank's higher possible upside, analysts plainly believe Avidbank is more favorable than VersaBank.

Profitability

This table compares VersaBank and Avidbank's net margins, return on equity and return on assets.

Valuation and Earnings

This table compares VersaBank and Avidbank's gross revenue, earnings per share (EPS) and valuation.

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

Summary

VersaBank beats Avidbank on 8 of the 13 factors compared between the two stocks.

About VersaBank

(Get Rating)

VersaBank engages in the provision of financial services. It operates through Digital Banking and DRTC. The Digital Banking segment offers business to business model using its financial technoolgy to address issues in the US banking market. The DRTC segment refers to developed IT security software and capabilities. The company was founded by David Roy Taylor on January 18, 1993 and is headquartered in London, Canada.

About Avidbank

(Get Rating)

Avidbank Holdings, Inc. engages in the provision of financial products and services. Through its subsidiary, it offers personal banking, corporate banking, corporate finance, and real estate lending services. The company was founded on December 17, 2007 and is headquartered in San Jose, CA.

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