Analyzing Auburn National Bancorporation (NASDAQ:AUBN) & First Business Financial Services (NASDAQ:FBIZ)

Auburn National Bancorporation (NASDAQ:AUBN) and First Business Financial Services (NASDAQ:FBIZ) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Profitability

This table compares Auburn National Bancorporation and First Business Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Auburn National Bancorporation	18.60%	9.10%	0.81%
First Business Financial Services	19.28%	14.92%	1.29%

Risk & Volatility

Auburn National Bancorporation has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, First Business Financial Services has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Auburn National Bancorporation and First Business Financial Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Auburn National Bancorporation	0	1	0	0	2.00
First Business Financial Services	0	0	3	1	3.25

First Business Financial Services has a consensus target price of $75.50, suggesting a potential upside of 5.52%. Given First Business Financial Services’ stronger consensus rating and higher possible upside, analysts plainly believe First Business Financial Services is more favorable than Auburn National Bancorporation.

Dividends

Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 4.0%. First Business Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 1.9%. Auburn National Bancorporation pays out 44.8% of its earnings in the form of a dividend. First Business Financial Services pays out 20.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. First Business Financial Services has increased its dividend for 13 consecutive years.

Valuation and Earnings

This table compares Auburn National Bancorporation and First Business Financial Services”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Auburn National Bancorporation	$34.26 million	2.72	$7.26 million	$2.41	11.08
First Business Financial Services	$279.25 million	2.14	$50.32 million	$6.56	10.91

First Business Financial Services has higher revenue and earnings than Auburn National Bancorporation. First Business Financial Services is trading at a lower price-to-earnings ratio than Auburn National Bancorporation, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

39.5% of Auburn National Bancorporation shares are held by institutional investors. Comparatively, 60.1% of First Business Financial Services shares are held by institutional investors. 18.7% of Auburn National Bancorporation shares are held by company insiders. Comparatively, 5.0% of First Business Financial Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

First Business Financial Services beats Auburn National Bancorporation on 14 of the 18 factors compared between the two stocks.

About Auburn National Bancorporation

Auburn National Bancorporation, Inc. operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company offers checking, savings, and transaction deposit accounts, as well as certificates of deposit. It also provides commercial, financial, agricultural, real estate construction, and consumer loan products; and other financial services. In addition, the company offers automated teller services; debit cards; online banking, bill payment, and other electronic banking services; and safe deposit boxes. Auburn National Bancorporation, Inc. was founded in 1907 and is headquartered in Auburn, Alabama.

About First Business Financial Services

First Business Financial Services, Inc. operates as the bank holding company for First Business Bank that provides commercial banking products and services for small and medium-sized businesses, business owners, executives, professionals, and high net worth individuals in Wisconsin, Kansas, and Missouri. The company offers real estate lending, commercial and industrial lending, asset-based lending, accounts receivable financing, equipment financing loans and leases, floorplan financing, vendor financing, small business administration lending and servicing, treasury management solutions, and company retirement services. It also provides private wealth management for individuals, including creating and executing asset allocation strategies, trust and estate administration, financial planning, investment management, and access to brokerage and custody-only services. In addition, the company offers bank consulting consisting of investment portfolio administrative and asset liability management services, and commercial deposit accounts. The company was founded in 1909 and is headquartered in Madison, Wisconsin.