First Busey (NASDAQ:BUSE) versus Enterprise Bancorp (NASDAQ:EBTC) Critical Comparison

Enterprise Bancorp (NASDAQ:EBTC) and First Busey (NASDAQ:BUSE) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.

Institutional & Insider Ownership

38.9% of Enterprise Bancorp shares are held by institutional investors. Comparatively, 56.5% of First Busey shares are held by institutional investors. 21.7% of Enterprise Bancorp shares are held by company insiders. Comparatively, 7.1% of First Busey shares are held 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Enterprise Bancorp and First Busey, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enterprise Bancorp	0	0	0	0	N/A
First Busey	0	1	4	0	2.80

First Busey has a consensus price target of $28.60, suggesting a potential upside of 9.08%. Given First Busey’s higher possible upside, analysts plainly believe First Busey is more favorable than Enterprise Bancorp.

Profitability

This table compares Enterprise Bancorp and First Busey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Enterprise Bancorp	14.99%	10.94%	0.78%
First Busey	17.18%	9.10%	0.96%

Dividends

Enterprise Bancorp pays an annual dividend of $0.96 per share and has a dividend yield of 3.0%. First Busey pays an annual dividend of $0.96 per share and has a dividend yield of 3.7%. Enterprise Bancorp pays out 33.0% of its earnings in the form of a dividend. First Busey pays out 48.5% 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. Enterprise Bancorp has raised its dividend for 6 consecutive years.

Risk & Volatility

Enterprise Bancorp has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, First Busey has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500.

Earnings & Valuation

This table compares Enterprise Bancorp and First Busey”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enterprise Bancorp	$167.53 million	2.37	$38.06 million	$2.91	11.04
First Busey	$444.45 million	3.35	$122.57 million	$1.98	13.24

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

Summary

First Busey beats Enterprise Bancorp on 11 of the 16 factors compared between the two stocks.

About Enterprise Bancorp

Enterprise Bancorp, Inc. operates as the holding company for Enterprise Bank and Trust Company that engages in the provision of commercial banking products and services. It offers commercial and retail deposit products, including checking accounts, limited-transactional savings and money market accounts, commercial sweep products, and term certificates of deposit. The company also provides commercial real estate, commercial and industrial, commercial construction, residential, and consumer loans, as well as home equity loans and lines of credit. In addition, the company offers cash management services; wealth advisory and management services that include customized investment management and trust services to individuals, family groups, commercial businesses, trusts, foundations, non-profit organizations, and endowments; brokerage and management services to individual investors; insurance services; and online and mobile banking services. The company was founded in 1989 and is headquartered in Lowell, Massachusetts.

About First Busey

First Busey Corporation operates as the bank holding company for Busey Bank that engages in the provision of retail and commercial banking products and services to individual, corporate, institutional, and governmental customers in the United States. It operates through three segments: Banking, Wealth Management, and FirsTech. The Banking segment provides banking services to individual customers, such as demand and savings deposits, money transfers, safe deposit services, individual retirement accounts and other fiduciary services, automated teller machines, and technology-based networks, as well as loan products, including residential real estate, home equity lines of credit, and consumer loans. This segment also offers banking services to corporate customers, including commercial, commercial real estate, real estate construction, and agricultural loans, as well as cash management services. The Wealth Management segment offers a range of investment and asset management, investment, brokerage, investment strategy consulting, fiduciary, philanthropic advisory, tax preparation, business succession planning, and employee retirement plan services to individuals, businesses, and foundations; and professional farm management services to the agricultural industry. The FirsTech segment provides payment technology solutions comprising online, mobile, and voice-recognition bill payments; money management and credit card networks; direct debit services; lockbox remittance processing for payments made by mail; and walk-in payments, as well as tools to help clients with billing, reconciliation, bill reminders, and treasury services. The company was founded in 1868 and is headquartered in Champaign, Illinois.