Atlantic Coast Financial Corporation (ACFC) & Eastern Virginia Bankshares (EVBS) Critical Review

Atlantic Coast Financial Corporation (NASDAQ: ACFC) and Eastern Virginia Bankshares (NASDAQ:EVBS) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitabiliy, dividends, analyst recommendations, risk and valuation.

Dividends

Eastern Virginia Bankshares pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. Atlantic Coast Financial Corporation does not pay a dividend. Eastern Virginia Bankshares pays out 30.0% of its earnings in the form of a dividend.

Risk and Volatility

Atlantic Coast Financial Corporation has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Eastern Virginia Bankshares has a beta of 0.03, meaning that its share price is 97% less volatile than the S&P 500.

Earnings and Valuation

This table compares Atlantic Coast Financial Corporation and Eastern Virginia Bankshares’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Atlantic Coast Financial Corporation $35.43 million 3.35 $6.50 million $0.42 18.24
Eastern Virginia Bankshares $52.54 million 2.69 $5.18 million $0.40 27.23

Atlantic Coast Financial Corporation has higher revenue, but lower earnings than Eastern Virginia Bankshares. Atlantic Coast Financial Corporation is trading at a lower price-to-earnings ratio than Eastern Virginia Bankshares, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Atlantic Coast Financial Corporation and Eastern Virginia Bankshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantic Coast Financial Corporation 14.88% 6.70% 0.63%
Eastern Virginia Bankshares 12.26% 6.56% 0.59%

Analyst Ratings

This is a summary of recent ratings and target prices for Atlantic Coast Financial Corporation and Eastern Virginia Bankshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantic Coast Financial Corporation 0 1 0 0 2.00
Eastern Virginia Bankshares 0 2 0 0 2.00

Atlantic Coast Financial Corporation currently has a consensus price target of $8.50, indicating a potential upside of 10.97%. Eastern Virginia Bankshares has a consensus price target of $9.50, indicating a potential downside of 12.76%. Given Atlantic Coast Financial Corporation’s higher possible upside, equities research analysts clearly believe Atlantic Coast Financial Corporation is more favorable than Eastern Virginia Bankshares.

Institutional & Insider Ownership

48.0% of Atlantic Coast Financial Corporation shares are owned by institutional investors. Comparatively, 47.0% of Eastern Virginia Bankshares shares are owned by institutional investors. 10.9% of Atlantic Coast Financial Corporation shares are owned by insiders. Comparatively, 4.8% of Eastern Virginia Bankshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Atlantic Coast Financial Corporation beats Eastern Virginia Bankshares on 11 of the 14 factors compared between the two stocks.

About Atlantic Coast Financial Corporation

Atlantic Coast Financial Corporation is a thrift holding company. The Company, through its subsidiary, Atlantic Coast Bank (the Bank), a federally chartered and insured stock savings bank supervised by the Office of the Comptroller of the Currency (the OCC), serves the Northeast Florida, Central Florida and Southeast Georgia markets. The Bank focuses on attracting deposits and investing those funds primarily in loans, including commercial real estate loans, consumer loans, first mortgages on owner-occupied, one- to four-family residences and home equity loans. Additionally, the Bank invests funds in multi-family residential loans, commercial business loans, and commercial and residential construction loans. The Bank originates commercial real estate loans and commercial and industrial loans with small to mid-size businesses for the purposes of purchasing real estate and inventory, financing equipment, and providing working capital.

About Eastern Virginia Bankshares

Eastern Virginia Bankshares, Inc. is a bank holding company. The Company operates through its bank subsidiary, EVB (the Bank). EVB is a community bank focusing on small to medium-sized businesses and consumers in its coastal plain markets and the emerging suburbs outside of the Richmond, Tidewater, and southern Virginia areas. The Company provides general commercial financial services to customers located in the geographic areas of its retail branch network. It provides a range of personal and commercial banking services, including commercial, consumer and real estate loans. Its investment securities include agency residential mortgage-backed securities, agency commercial mortgage-backed securities, and state and political subdivisions. The Company offers a range of retail and commercial deposit products and fee-based services. Its deposits include demand deposits, savings and money market accounts, and time deposits.

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