Comparing Capital Bancorp (NASDAQ:CBNK) & Nicolet Bankshares (NYSE:NIC)

Nicolet Bankshares (NYSE:NIC) and Capital Bancorp (NASDAQ:CBNK) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, profitability, earnings, dividends, analyst recommendations and valuation.

Risk & Volatility

Nicolet Bankshares has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Capital Bancorp has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Nicolet Bankshares and Capital Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nicolet Bankshares	0	3	1	0	2.25
Capital Bancorp	0	1	3	0	2.75

Nicolet Bankshares currently has a consensus price target of $100.00, suggesting a potential upside of 12.59%. Capital Bancorp has a consensus price target of $27.00, suggesting a potential upside of 12.45%. Given Nicolet Bankshares’ higher possible upside, research analysts clearly believe Nicolet Bankshares is more favorable than Capital Bancorp.

Insider & Institutional Ownership

43.1% of Nicolet Bankshares shares are owned by institutional investors. Comparatively, 56.1% of Capital Bancorp shares are owned by institutional investors. 16.4% of Nicolet Bankshares shares are owned by company insiders. Comparatively, 32.5% of Capital Bancorp shares are owned 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.

Profitability

This table compares Nicolet Bankshares and Capital Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nicolet Bankshares	21.13%	10.37%	1.26%
Capital Bancorp	15.35%	13.54%	1.50%

Valuation & Earnings

This table compares Nicolet Bankshares and Capital Bancorp’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nicolet Bankshares	$336.61 million	3.94	$61.52 million	$6.49	13.69
Capital Bancorp	$168.89 million	1.97	$35.87 million	$2.34	10.26

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

Dividends

Nicolet Bankshares pays an annual dividend of $1.12 per share and has a dividend yield of 1.3%. Capital Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. Nicolet Bankshares pays out 17.3% of its earnings in the form of a dividend. Capital Bancorp pays out 17.1% 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. Capital Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

About Nicolet Bankshares

Nicolet Bankshares, Inc. operates as the bank holding company for Nicolet National Bank that provides banking products and services for businesses and individuals in Wisconsin and Michigan. The company accepts checking, savings, and money market accounts; various certificates of deposit; and individual retirement accounts. It also offers commercial loans, including commercial, industrial, and business loans and lines of credit; commercial real estate loans; agricultural (AG) production and AG real estate loans; commercial real estate investment real estate loans; construction and land development loans; residential real estate loans, such as residential first lien and junior lien mortgages, home equity loans, lines of credit, and residential construction loans; and consumer loans. In addition, the company provides cash management, international banking, personal brokerage, safe deposit boxes, and trust and fiduciary services, as well as wealth management and retirement plan services. Further, it offers mortgage refinancing; online services, such as commercial, retail, and trust online banking; automated bill payment, mobile banking deposits and account access, and remote deposit capture services; and other services consisting of wire transfers, debit cards, credit cards, pre-paid gift cards, direct deposits, and official bank checks, as well as facilitates crop insurance products. The company was formerly known as Green Bay Financial Corporation and changed its name to Nicolet Bankshares, Inc. in March 2002. The company was incorporated in 2000 and is headquartered in Green Bay, Wisconsin.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.