Reviewing Burke & Herbert Financial Services (NASDAQ:BHRB) & Carter Bankshares (NASDAQ:CARE)

Burke & Herbert Financial Services (NASDAQ:BHRB) and Carter Bankshares (NASDAQ:CARE) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Insider and Institutional Ownership

41.5% of Carter Bankshares shares are owned by institutional investors. 9.7% of Burke & Herbert Financial Services shares are owned by company insiders. Comparatively, 1.9% of Carter Bankshares shares are owned by company 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.

Analyst Ratings

This is a breakdown of current ratings and price targets for Burke & Herbert Financial Services and Carter Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Burke & Herbert Financial Services	0	0	2	0	3.00
Carter Bankshares	0	0	2	0	3.00

Burke & Herbert Financial Services presently has a consensus price target of $76.00, suggesting a potential upside of 29.52%. Carter Bankshares has a consensus price target of $21.50, suggesting a potential upside of 27.29%. Given Burke & Herbert Financial Services’ higher possible upside, analysts clearly believe Burke & Herbert Financial Services is more favorable than Carter Bankshares.

Earnings and Valuation

This table compares Burke & Herbert Financial Services and Carter Bankshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Burke & Herbert Financial Services	$256.55 million	3.43	$35.71 million	$2.40	24.45
Carter Bankshares	$132.40 million	2.95	$24.52 million	$1.06	15.93

Burke & Herbert Financial Services has higher revenue and earnings than Carter Bankshares. Carter Bankshares is trading at a lower price-to-earnings ratio than Burke & Herbert Financial Services, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Burke & Herbert Financial Services and Carter Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Burke & Herbert Financial Services	8.88%	15.15%	1.35%
Carter Bankshares	10.09%	6.50%	0.53%

Summary

Burke & Herbert Financial Services beats Carter Bankshares on 9 of the 11 factors compared between the two stocks.

About Burke & Herbert Financial Services

Burke Herbert Financial Services Corp. is a bank holding company, which engages in the provision of banking products and financial services to small to medium-sized businesses, their owners and employees, professional corporations, non-profits, and individuals. It operates through the following loan portfolio segments: Commercial Real Estate, Owner-Occupied Commercial Real Estate, Acquisition, Construction, and Development, Commercial and Industrial, Single Family Residential (1-4 Units), and Consumer Non-Real Estate and Other. The Commercial Real Estate segment includes leasing of the real estate collateral or income generated from the sale of the collateral. The Owner-Occupied Commercial Real Estate segment focuses on the operations of the business that occupies the property and the value of the collateral. The Acquisition, Construction, and Development segment offers creditworthiness of the borrower, project completion within budget, sale after completion, and the value of the collateral. The Commercial and Industrial segment is involved in the operations of the business and the value of the collateral. The Single Family Residential (1-4 Units) segment provides loans for investment purpose carry risk associated with the continued creditworthiness of the borrower, the value of the collateral, and either the net operating income generated from the lease of the real estate collateral or income generated from the sale of the collateral. The Consumer Non-Real Estate and Other segment covers loans carry risk associated with the creditworthiness of the borrower and the value of the collateral. The company was founded on September 14, 2022 and is headquartered in Alexandria, VA.

About Carter Bankshares

Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.