Analyzing Eagle Financial Services (NASDAQ:EFSI) and CF Bankshares (NASDAQ:CFBK)

CF Bankshares (NASDAQ:CFBK) and Eagle Financial Services (NASDAQ:EFSI) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Dividends

CF Bankshares pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 2.7%. CF Bankshares pays out 10.4% of its earnings in the form of a dividend. Eagle Financial Services pays out 37.6% 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. CF Bankshares has increased its dividend for 4 consecutive years and Eagle Financial Services has increased its dividend for 14 consecutive years. Eagle Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares CF Bankshares and Eagle Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CF Bankshares	18.08%	11.92%	1.05%
Eagle Financial Services	14.55%	8.02%	0.82%

Insider and Institutional Ownership

41.1% of CF Bankshares shares are held by institutional investors. Comparatively, 0.3% of Eagle Financial Services shares are held by institutional investors. 17.7% of CF Bankshares shares are held by company insiders. Comparatively, 7.1% of Eagle Financial Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares CF Bankshares and Eagle Financial Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CF Bankshares	$63.01 million	3.54	$17.54 million	$3.46	10.06
Eagle Financial Services	$87.31 million	2.81	$8.21 million	$3.30	13.72

CF Bankshares has higher earnings, but lower revenue than Eagle Financial Services. CF Bankshares is trading at a lower price-to-earnings ratio than Eagle Financial Services, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for CF Bankshares and Eagle Financial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CF Bankshares	0	0	2	0	3.00
Eagle Financial Services	0	3	2	1	2.67

CF Bankshares currently has a consensus price target of $40.00, suggesting a potential upside of 14.94%. Eagle Financial Services has a consensus price target of $43.75, suggesting a potential downside of 3.38%. Given CF Bankshares’ stronger consensus rating and higher probable upside, analysts plainly believe CF Bankshares is more favorable than Eagle Financial Services.

Risk & Volatility

CF Bankshares has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500. Comparatively, Eagle Financial Services has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500.

Summary

CF Bankshares beats Eagle Financial Services on 12 of the 17 factors compared between the two stocks.

About CF Bankshares

CF Bankshares Inc. operates as the bank holding company for CFBank, National Association that provides various banking products and services in the United States. The company accepts savings, retail and business checking accounts, and money market accounts, as well as certificates of deposit. It offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans and equipment leases; residential real estate loans and treasury management depository services; retail banking services and products. In addition, the company offers consumer loans, such as home equity lines of credit, home improvement loans, and loans secured by deposits and purchased loans, as well as other loans. Further, it provides online internet banking, mobile banking, and remote deposits. The company was formerly known as Central Federal Corporation and changed its name to CF Bankshares Inc. in July 2020. CF Bankshares Inc. was founded in 1892 and is based in Columbus, Ohio.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, Virginia.