Enterprise Bancorp

Ticker: EBTC, Buy below $25.

Enterprise Bank offers commercial and consumer loan and deposit products, investment management, trust, and insurance services.

Why I Would Buy

  1. Insider Holding – 18%+ of the shares are held by insiders.   
  2. Dividend – 3%+ dividend, with a payout ratio < 30%.
  3. Cheap – Trailing P/E of 9, P/B of 0.9.
  4. Return on Equity: between 9 and 12+% returns on equity annually for most of last decade.

What Could Go Wrong

  1. Tiny Bank – Microcap, large exposure to commercial loans in a limited geographic area in Massachusetts.
  2. Coronavirus Impact – The extent of loan book that could become non-performing is unknown.

Disclosure: I am long EBTC, please read additional disclosures here before taking any action based on this post.