Head-To-Head Review: Citizens & Northern (NASDAQ:CZNC) & Capital Bancorp (NASDAQ:CBNK)

Capital Bancorp (NASDAQ:CBNK) and Citizens & Northern (NASDAQ:CZNC) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

56.1% of Capital Bancorp shares are owned by institutional investors. Comparatively, 30.8% of Citizens & Northern shares are owned by institutional investors. 33.5% of Capital Bancorp shares are owned by insiders. Comparatively, 4.7% of Citizens & Northern shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Capital Bancorp pays an annual dividend of $0.56 per share and has a dividend yield of 1.6%. Citizens & Northern pays an annual dividend of $1.12 per share and has a dividend yield of 4.4%. Capital Bancorp pays out 16.5% of its earnings in the form of a dividend. Citizens & Northern pays out 75.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Bancorp has raised its dividend for 3 consecutive years.

Earnings & Valuation

This table compares Capital Bancorp and Citizens & Northern”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital Bancorp	$310.06 million	1.89	$57.17 million	$3.40	10.60
Citizens & Northern	$170.03 million	2.71	$23.43 million	$1.48	17.36

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

Risk and Volatility

Capital Bancorp has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, Citizens & Northern has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Capital Bancorp and Citizens & Northern, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital Bancorp	0	3	3	0	2.50
Citizens & Northern	0	3	1	0	2.25

Capital Bancorp currently has a consensus target price of $37.33, suggesting a potential upside of 3.56%. Citizens & Northern has a consensus target price of $23.50, suggesting a potential downside of 8.56%. Given Capital Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Capital Bancorp is more favorable than Citizens & Northern.

Profitability

This table compares Capital Bancorp and Citizens & Northern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital Bancorp	17.47%	13.14%	1.46%
Citizens & Northern	13.28%	9.54%	1.04%

Summary

Capital Bancorp beats Citizens & Northern on 14 of the 17 factors compared between the two stocks.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.

About Citizens & Northern

Citizens & Northern Corp. is a holding company, which engages in community banking. It provides a full range of banking and mortgage services to individual and corporate customers in North Central Pennsylvania and Southern New York State. The firm’s lending products include mortgage loans, commercial loans, and consumer loans. Its deposit products include various types of checking accounts, passbook and statement savings, money market accounts, interest checking accounts, individual retirement accounts, and certificates of deposit. The company was founded in 1864 and is headquartered in Wellsboro, PA.