Guaranty Federal Bancshares (GFED) and Pacific Premier Bancorp (PPBI) Critical Comparison

Guaranty Federal Bancshares (NASDAQ: GFED) and Pacific Premier Bancorp (NASDAQ:PPBI) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Guaranty Federal Bancshares and Pacific Premier Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guaranty Federal Bancshares 0 0 1 0 3.00
Pacific Premier Bancorp 0 1 2 0 2.67

Guaranty Federal Bancshares presently has a consensus target price of $25.00, suggesting a potential upside of 6.61%. Pacific Premier Bancorp has a consensus target price of $47.33, suggesting a potential upside of 11.77%. Given Pacific Premier Bancorp’s higher probable upside, analysts clearly believe Pacific Premier Bancorp is more favorable than Guaranty Federal Bancshares.

Dividends

Guaranty Federal Bancshares pays an annual dividend of $0.48 per share and has a dividend yield of 2.0%. Pacific Premier Bancorp does not pay a dividend. Guaranty Federal Bancshares pays out 32.9% of its earnings in the form of a dividend.

Profitability

This table compares Guaranty Federal Bancshares and Pacific Premier Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Guaranty Federal Bancshares 14.70% 8.79% 0.84%
Pacific Premier Bancorp 22.48% 8.57% 1.31%

Valuation & Earnings

This table compares Guaranty Federal Bancshares and Pacific Premier Bancorp’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Guaranty Federal Bancshares $35.17 million 2.97 $5.15 million $1.46 16.06
Pacific Premier Bancorp $301.12 million 6.54 $60.10 million $1.77 23.93

Pacific Premier Bancorp has higher revenue and earnings than Guaranty Federal Bancshares. Guaranty Federal Bancshares is trading at a lower price-to-earnings ratio than Pacific Premier Bancorp, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

26.8% of Guaranty Federal Bancshares shares are held by institutional investors. Comparatively, 85.5% of Pacific Premier Bancorp shares are held by institutional investors. 29.5% of Guaranty Federal Bancshares shares are held by insiders. Comparatively, 4.1% of Pacific Premier Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Guaranty Federal Bancshares has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500. Comparatively, Pacific Premier Bancorp has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Summary

Pacific Premier Bancorp beats Guaranty Federal Bancshares on 12 of the 16 factors compared between the two stocks.

Guaranty Federal Bancshares Company Profile

Guaranty Federal Bancshares, Inc. operates as the bank holding company for Guaranty Bank that provides banking products and services in the southwestern corner of Missouri. The company's deposit products include checking accounts, money market accounts, savings accounts, fixed-term certificates of deposit, and individual retirement accounts, as well as demand deposits and NOW accounts. Its loan portfolio comprises commercial real estate loans, one-to four-family mortgage loans, multi-family residential mortgage loans, and construction loans; and consumer and other loans, such as loans secured by certificates of deposit, automobile loans, boat loans, and home equity loans, as well as business loans. As of April 18, 2017, the company had nine full-service branches in Greene and Christian Counties; and loan production offices in Jasper and Webster Counties. It also provides access to approximately 24,000 ATMs. Guaranty Federal Bancshares, Inc. was founded in 1913 and is based in Springfield, Missouri.

Pacific Premier Bancorp Company Profile

Pacific Premier Bancorp, Inc. operates as the bank holding company for Pacific Premier Bank that provides banking services to businesses, professionals, real estate investors, and non-profit organizations. Its deposit products include checking, money market, and savings accounts. The company's loan portfolio comprises commercial business loans, lines of credit, small business administration loans, commercial real estate loans, agribusiness loans, home equity lines of credit, construction loans, farmland, and consumer loans, as well as multi-family residential, one-to-four family real estate, commercial and industrial, and franchise lending; warehouse repurchase facilities; and credit facilities to Home Owners' Associations (HOA) and HOA management companies. It also offers cash management, electronic banking, and online bill payment services. The company conducts business through 33 full-service depository branches in the counties of Orange, Los Angeles, Riverside, San Bernardino, San Diego, San Luis Obispo, and Santa Barbara, California, as well as Clark County, Nevada. Pacific Premier Bancorp, Inc. was founded in 1983 and is headquartered in Irvine, California.

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