Northeast Bank (NASDAQ:NBN) and Truxton (OTCMKTS:TRUX) Critical Survey

Northeast Bank (NASDAQ:NBN) and Truxton (OTCMKTS:TRUX) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitability, earnings, valuation, analyst recommendations, risk and institutional ownership.

Insider and Institutional Ownership

0.4% of Truxton shares are held by institutional investors. 14.2% of Northeast Bank shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Northeast Bank has a beta of 1.06, suggesting that its stock price is 6% more volatile than the S&P 500. Comparatively, Truxton has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Earnings and Valuation

This table compares Northeast Bank and Truxton”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Bank	$170.62 million	4.41	$58.23 million	$8.59	10.69
Truxton	$78.37 million	2.76	$18.41 million	$6.34	11.83

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

Dividends

Northeast Bank pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Truxton pays an annual dividend of $2.00 per share and has a dividend yield of 2.7%. Northeast Bank pays out 0.5% of its earnings in the form of a dividend. Truxton pays out 31.5% 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.

Analyst Ratings

This is a summary of current recommendations and price targets for Northeast Bank and Truxton, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northeast Bank	0	1	1	0	2.50
Truxton	0	0	0	0	0.00

Northeast Bank currently has a consensus target price of $97.50, suggesting a potential upside of 6.22%. Given Northeast Bank’s stronger consensus rating and higher probable upside, research analysts clearly believe Northeast Bank is more favorable than Truxton.

Profitability

This table compares Northeast Bank and Truxton’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northeast Bank	22.87%	N/A	N/A
Truxton	23.49%	N/A	N/A

Summary

Northeast Bank beats Truxton on 10 of the 14 factors compared between the two stocks.

About Northeast Bank

Northeast Bank provides banking services to individual and corporate customers in Maine. The company's deposit products include demand deposit, NOW, money market, savings, certificate of deposit, and individual retirement accounts, as well as checking accounts. Its loan portfolio comprises residential mortgage loans; multi-family and other commercial real estate loans; commercial and industrial loans, such as term loans, lines of credit and equipment, and receivables financing; consumer loans comprising mobile home and overdraft, and deposit-secured loans; and small business administration loans. In addition, the company offers telephone banking, online banking and bill payment, mobile banking, cash management, and remote deposit capture services, as well as debit and credit card, ATM, electronic transfer, and check services. Further, it provides various services, such as money market, merchant, and payroll and HR. Northeast Bank was founded in 1872 and is headquartered in Portland, Maine.

About Truxton

Truxton Corporation, through its subsidiaries, provides various banking, investment management, and trust administration services to individuals, businesses, and charitable institutions in the United States. The company offers deposit products, including demand, money market accounts, and certificates of deposit. It also provides lending products, such as residential and commercial real estate mortgages, commercial loans, construction and land development loans, commercial and industrial loans, operating lines of credit, and loans to individual. In addition, the company offers strategic and capital advisory services, business banking, and treasury management services; and insurance products. The company was formerly known as NBT Holdings Inc. and changed its name to Truxton Corporation in May 2013. Truxton Corporation was founded in 2004 and is based in Nashville, Tennessee.