Analyzing LCNB (NASDAQ:LCNB) & Eastern Bankshares (NASDAQ:EBC)

Eastern Bankshares (NASDAQ:EBC) and LCNB (NASDAQ:LCNB) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Earnings & Valuation

This table compares Eastern Bankshares and LCNB”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eastern Bankshares	$1.33 billion	3.85	$88.22 million	$1.74	12.87
LCNB	$124.52 million	2.26	$23.12 million	$1.75	11.27

Eastern Bankshares has higher revenue and earnings than LCNB. LCNB is trading at a lower price-to-earnings ratio than Eastern Bankshares, indicating that it is currently the more affordable of the two stocks.

Dividends

Eastern Bankshares pays an annual dividend of $0.60 per share and has a dividend yield of 2.7%. LCNB pays an annual dividend of $0.88 per share and has a dividend yield of 4.5%. Eastern Bankshares pays out 34.5% of its earnings in the form of a dividend. LCNB pays out 50.3% 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. Eastern Bankshares has raised its dividend for 5 consecutive years and LCNB has raised its dividend for 7 consecutive years. LCNB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Eastern Bankshares and LCNB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastern Bankshares	24.04%	9.37%	1.29%
LCNB	20.02%	9.00%	1.11%

Volatility and Risk

Eastern Bankshares has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, LCNB has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Insider and Institutional Ownership

71.7% of Eastern Bankshares shares are owned by institutional investors. Comparatively, 34.7% of LCNB shares are owned by institutional investors. 1.3% of Eastern Bankshares shares are owned by company insiders. Comparatively, 5.7% of LCNB shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Eastern Bankshares and LCNB, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eastern Bankshares	0	3	6	0	2.67
LCNB	0	2	1	0	2.33

Eastern Bankshares presently has a consensus price target of $25.00, suggesting a potential upside of 11.66%. LCNB has a consensus price target of $20.00, suggesting a potential upside of 1.42%. Given Eastern Bankshares’ stronger consensus rating and higher possible upside, research analysts clearly believe Eastern Bankshares is more favorable than LCNB.

Summary

Eastern Bankshares beats LCNB on 13 of the 17 factors compared between the two stocks.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.

About LCNB

LCNB Corp. operates as the financial holding company for LCNB National Bank that provides banking services in Ohio. Its deposit products include checking accounts, demand deposits, savings accounts, NOW and money market deposits, as well as individual retirement accounts and time certificates. The company's loan products comprise commercial and industrial, commercial and residential real estate, agricultural, construction, and small business administration loans; and residential mortgage loans that consists of loans for purchasing or refinancing personal residences, home equity lines of credit, and loans for commercial or consumer purposes secured by residential mortgages. It offers consumer loans, such as automobile, recreational vehicles, boat, home improvement, and personal loans. In addition, the company provides trust administration, estate settlement, and fiduciary services; and investment management services for trusts, agency accounts, individual retirement accounts, and foundations/endowments. Further, it offers investment services and products, including financial needs analysis, mutual funds, securities trading, annuities, and life insurance; and security brokerage services. Additionally, the company provides safe deposit boxes, night depositories, cashier's checks, bank-by-mail, ATMs, cash and transaction services, debit cards, wire transfers, electronic funds transfer, utility bill collections, notary public service, cash management services, telephone banking, PC Internet banking, mobile banking, and other services for individuals and businesses. LCNB Corp. was founded in 1877 and is headquartered in Lebanon, Ohio.