Contrasting Fidelity D & D Bancorp (NASDAQ:FDBC) & Alerus Financial (NASDAQ:ALRS)

Fidelity D & D Bancorp (NASDAQ:FDBC) and Alerus Financial (NASDAQ:ALRS) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Valuation and Earnings

This table compares Fidelity D & D Bancorp and Alerus Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidelity D & D Bancorp	$126.04 million	2.03	$20.79 million	$3.61	12.33
Alerus Financial	$336.51 million	1.61	$21.07 million	$1.02	21.00

Alerus Financial has higher revenue and earnings than Fidelity D & D Bancorp. Fidelity D & D Bancorp is trading at a lower price-to-earnings ratio than Alerus Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Fidelity D & D Bancorp and Alerus Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidelity D & D Bancorp	0	0	0	0	0.00
Alerus Financial	0	3	2	0	2.40

Alerus Financial has a consensus price target of $23.40, suggesting a potential upside of 9.24%. Given Alerus Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Alerus Financial is more favorable than Fidelity D & D Bancorp.

Volatility & Risk

Fidelity D & D Bancorp has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500. Comparatively, Alerus Financial has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Institutional and Insider Ownership

20.1% of Fidelity D & D Bancorp shares are held by institutional investors. Comparatively, 51.3% of Alerus Financial shares are held by institutional investors. 21.0% of Fidelity D & D Bancorp shares are held by insiders. Comparatively, 5.6% of Alerus Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Fidelity D & D Bancorp and Alerus Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fidelity D & D Bancorp	16.50%	10.49%	0.82%
Alerus Financial	6.26%	7.66%	0.68%

Dividends

Fidelity D & D Bancorp pays an annual dividend of $1.60 per share and has a dividend yield of 3.6%. Alerus Financial pays an annual dividend of $0.80 per share and has a dividend yield of 3.7%. Fidelity D & D Bancorp pays out 44.3% of its earnings in the form of a dividend. Alerus Financial pays out 78.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alerus Financial has raised its dividend for 24 consecutive years. Alerus Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Alerus Financial beats Fidelity D & D Bancorp on 10 of the 17 factors compared between the two stocks.

About Fidelity D & D Bancorp

Fidelity D&D Bancorp, Inc. is a holding company, which engages in the provision of commercial banking services. It operates through the following segments: Commercial and Industrial, Commercial Real Estate, Consumer, and Residential Real Estate. The Commercial and Industrial segment refers to identified historic and/or the projected cash flows of the borrower and secondarily to the underlying collateral provided by the borrower. The Commercial Real Estate segment offers finances purchase of real estate, refinance existing obligations, and/or to provide capital. The Consumer segment includes home equity installment loans and lines of credit. The Residential Real Estate segment operates as a secured first lien position of the borrower’s residential real estate. The company was founded in 1902 and is headquartered in Dunmore, PA.

About Alerus Financial

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that engages in the provision of various financial services to businesses and consumers. The company operates in four segments: Banking, Mortgage, Retirement and Benefit Services, and Wealth Management. It offers various deposit products, including demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault services, merchant services, and other cash management services. The company also provides commercial loans, business term loans, lines of credit, and commercial real estate loans, as well as construction and land development loans; consumer lending products, including residential first mortgage loans; installment loans and lines of credit; and second mortgage loans. In addition, it offers retirement plan administration and investment advisory services, employee stock ownership plan, fiduciary services, payroll, health savings accounts, and other benefit services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit and credit cards, online banking, mobile banking/wallet, payment, private banking, payroll accounts, flex spending accounts, administration, and government health insurance program services. It offers banking services in North Dakota, Minnesota, and Arizona; and retirement and benefit plans through offices located in Michigan, Minnesota, and Colorado. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.