Here's Why We Think Peoples Bancorp of North Carolina (NASDAQ:PEBK) Is Well Worth Watching
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Peoples Bancorp of North Carolina (NASDAQ:PEBK). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Peoples Bancorp of North Carolina with the means to add long-term value to shareholders.
See our latest analysis for Peoples Bancorp of North Carolina
How Fast Is Peoples Bancorp of North Carolina Growing?
Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Over the last three years, Peoples Bancorp of North Carolina has grown EPS by 8.9% per year. That's a pretty good rate, if the company can sustain it.
It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. Not all of Peoples Bancorp of North Carolina's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. EBIT margins for Peoples Bancorp of North Carolina remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 8.7% to US$76m. That's encouraging news for the company!
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
Since Peoples Bancorp of North Carolina is no giant, with a market capitalisation of US$113m, you should definitely check its cash and debt before getting too excited about its prospects.
Are Peoples Bancorp of North Carolina Insiders Aligned With All Shareholders?
It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. Peoples Bancorp of North Carolina followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. To be specific, they have US$17m worth of shares. That's a lot of money, and no small incentive to work hard. Those holdings account for over 15% of the company; visible skin in the game.
It's good to see that insiders are invested in the company, but are remuneration levels reasonable? Our quick analysis into CEO remuneration would seem to indicate they are. For companies with market capitalisations under US$200m, like Peoples Bancorp of North Carolina, the median CEO pay is around US$747k.
Peoples Bancorp of North Carolina offered total compensation worth US$636k to its CEO in the year to December 2022. That seems pretty reasonable, especially given it's below the median for similar sized companies. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of a culture of integrity, in a broader sense.
Should You Add Peoples Bancorp of North Carolina To Your Watchlist?
One important encouraging feature of Peoples Bancorp of North Carolina is that it is growing profits. Earnings growth might be the main attraction for Peoples Bancorp of North Carolina, but the fun does not stop there. With company insiders aligning themselves considerably with the company's success and modest CEO compensation, there's no arguments that this is a stock worth looking into. What about risks? Every company has them, and we've spotted 1 warning sign for Peoples Bancorp of North Carolina you should know about.
Although Peoples Bancorp of North Carolina certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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