Head to Head Contrast: ChoiceOne Financial Services (NASDAQ:COFS) vs. Parke Bancorp (NASDAQ:PKBK)

ChoiceOne Financial Services (NASDAQ:COFS) and Parke Bancorp (NASDAQ:PKBK) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Insider and Institutional Ownership

19.9% of ChoiceOne Financial Services shares are held by institutional investors. Comparatively, 49.7% of Parke Bancorp shares are held by institutional investors. 7.9% of ChoiceOne Financial Services shares are held by company insiders. Comparatively, 15.3% of Parke Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for ChoiceOne Financial Services and Parke Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ChoiceOne Financial Services	0	0	3	0	3.00
Parke Bancorp	0	0	0	0	0.00

ChoiceOne Financial Services currently has a consensus price target of $37.00, indicating a potential upside of 29.78%. Given ChoiceOne Financial Services’ stronger consensus rating and higher possible upside, equities analysts clearly believe ChoiceOne Financial Services is more favorable than Parke Bancorp.

Earnings & Valuation

This table compares ChoiceOne Financial Services and Parke Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ChoiceOne Financial Services	$92.44 million	2.77	$26.73 million	$3.26	8.75
Parke Bancorp	$63.01 million	3.48	$27.51 million	$2.27	8.15

Parke Bancorp has lower revenue, but higher earnings than ChoiceOne Financial Services. Parke Bancorp is trading at a lower price-to-earnings ratio than ChoiceOne Financial Services, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares ChoiceOne Financial Services and Parke Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ChoiceOne Financial Services	19.21%	12.44%	1.04%
Parke Bancorp	21.25%	9.41%	1.35%

Volatility & Risk

ChoiceOne Financial Services has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Parke Bancorp has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.

Dividends

ChoiceOne Financial Services pays an annual dividend of $1.12 per share and has a dividend yield of 3.9%. Parke Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 3.9%. ChoiceOne Financial Services pays out 34.4% of its earnings in the form of a dividend. Parke Bancorp pays out 31.7% 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. ChoiceOne Financial Services has increased its dividend for 13 consecutive years. ChoiceOne Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

ChoiceOne Financial Services beats Parke Bancorp on 9 of the 17 factors compared between the two stocks.

About ChoiceOne Financial Services

ChoiceOne Financial Services, Inc. operates as the bank holding company for ChoiceOne Bank that provides banking services to corporations, partnerships, and individuals in Michigan. The company offers various deposit products, including time, savings, and demand deposits, safe deposit, and automated transaction machine services. It also provides commercial lending products, such as business, industry, agricultural, construction, inventory, and real estate loans; and consumer loans comprising direct and indirect loans to consumers and purchasers of residential and real properties. In addition, the company offers alternative investment products, which include annuities and mutual funds; and sells insurance policies, such as life and health for commercial and consumer clients. Further, it provides trust and wealth management services. ChoiceOne Financial Services, Inc. was founded in 1898 and is headquartered in Sparta, Michigan.

About Parke Bancorp

Parke Bancorp, Inc. operates as the bank holding company for Parke Bank that provides personal and business financial services to individuals and small to mid-sized businesses. The company offers various deposit products, including checking, savings, time, money market, and individual retirement accounts, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, construction, commercial and residential real estate mortgage, and consumer loans. In addition, the company provides debit cards, internet banking, and online bill payment services. Parke Bancorp, Inc. was founded in 1999 and is headquartered in Washington Township, New Jersey.