Head-To-Head Contrast: Provident Financial (NASDAQ:PROV) & Auburn National Bancorporation (NASDAQ:AUBN)

Auburn National Bancorporation (NASDAQ:AUBN) and Provident Financial (NASDAQ:PROV) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Volatility and Risk

Auburn National Bancorporation has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Provident Financial has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500.

Valuation & Earnings

This table compares Auburn National Bancorporation and Provident Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Auburn National Bancorporation	$43.89 million	2.14	$7.26 million	$2.41	11.20
Provident Financial	$59.62 million	1.93	$6.66 million	$1.03	17.94

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

Insider & Institutional Ownership

39.5% of Auburn National Bancorporation shares are owned by institutional investors. Comparatively, 71.3% of Provident Financial shares are owned by institutional investors. 18.7% of Auburn National Bancorporation shares are owned by company insiders. Comparatively, 11.5% of Provident Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Auburn National Bancorporation and Provident Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Auburn National Bancorporation	0	1	0	0	2.00
Provident Financial	0	2	1	0	2.33

Provident Financial has a consensus target price of $18.00, suggesting a potential downside of 2.60%. Given Provident Financial’s stronger consensus rating and higher possible upside, analysts clearly believe Provident Financial is more favorable than Auburn National Bancorporation.

Profitability

This table compares Auburn National Bancorporation and Provident Financial’s 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%
Provident Financial	11.16%	5.23%	0.54%

Dividends

Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 4.0%. Provident Financial pays an annual dividend of $0.56 per share and has a dividend yield of 3.0%. Auburn National Bancorporation pays out 44.8% of its earnings in the form of a dividend. Provident Financial pays out 54.4% 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. Auburn National Bancorporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Auburn National Bancorporation beats Provident Financial on 10 of the 16 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 Provident Financial

Provident Financial Holdings, Inc. operates as the holding company for Provident Savings Bank, F.S.B. that provides community banking services to consumers and small to mid-sized businesses in the Inland Empire region of Southern California. The company's deposit products include checking, savings, and money market accounts, as well as time deposits; and loan portfolio consists of single-family, multi-family, commercial real estate, construction, mortgage, commercial business, and consumer loans. It also offers investment services comprising the sale of investment products, such as annuities and mutual funds; and trustee services for real estate transactions. The company operates through full-service banking offices in Riverside County and San Bernardino County. Provident Financial Holdings, Inc. was founded in 1956 and is headquartered in Riverside, California.