Reviewing First Foundation (NASDAQ:FFWM) and SB Financial Group (NASDAQ:SBFG)

First Foundation (NASDAQ:FFWM – Get Rating) and SB Financial Group (NASDAQ:SBFG – Get Rating) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Risk & Volatility

First Foundation has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, SB Financial Group has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.

Valuation and Earnings

This table compares First Foundation and SB Financial Group’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Foundation	$452.11 million	1.17	$110.51 million	$1.96	4.81
SB Financial Group	$62.80 million	1.54	$12.52 million	$1.77	7.79

First Foundation has higher revenue and earnings than SB Financial Group. First Foundation is trading at a lower price-to-earnings ratio than SB Financial Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares First Foundation and SB Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Foundation	24.44%	10.18%	0.96%
SB Financial Group	19.94%	9.39%	0.87%

Dividends

First Foundation pays an annual dividend of $0.44 per share and has a dividend yield of 4.7%. SB Financial Group pays an annual dividend of $0.50 per share and has a dividend yield of 3.6%. First Foundation pays out 22.4% of its earnings in the form of a dividend. SB Financial Group pays out 28.2% 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. First Foundation has raised its dividend for 3 consecutive years. First Foundation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

69.3% of First Foundation shares are owned by institutional investors. Comparatively, 49.9% of SB Financial Group shares are owned by institutional investors. 10.2% of First Foundation shares are owned by insiders. Comparatively, 4.1% of SB Financial Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for First Foundation and SB Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Foundation	0	3	1	0	2.25
SB Financial Group	0	0	0	0	N/A

First Foundation currently has a consensus price target of $18.75, indicating a potential upside of 99.04%. Given First Foundation’s higher probable upside, analysts clearly believe First Foundation is more favorable than SB Financial Group.

Summary

First Foundation beats SB Financial Group on 14 of the 16 factors compared between the two stocks.

About First Foundation

(Get Rating)

First Foundation, Inc. is a bank holding, which engages in the provision of a comprehensive platform of financial services to individuals, businesses, and organizations. It operates through the following segments: Banking, Wealth Management, and Other. The company was founded by John Avak Hakopian and Ulrich Emanuel Keller, Jr. in 1990 and is headquartered in Dallas, TX.

About SB Financial Group

(Get Rating)

SB Financial Group, Inc. is a financial holding company, which engages in the provision of commercial banking and wealth management solutions. The company offers checking, savings, e-services, mortgage loans, mortgage applications, mortgage tool, credit cards, and loans and lines services. It also provides investment and asset management, retirement services, insurance, business succession planning, and brokerage services. The company was founded in 1983 and is headquartered in Defiance, OH.