Community Heritage Financial (OTCMKTS:CMHF) and First Mid Bancshares (NASDAQ:FMBH) Financial Review

First Mid Bancshares (NASDAQ:FMBH) and Community Heritage Financial (OTCMKTS:CMHF) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Risk and Volatility

First Mid Bancshares has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500. Comparatively, Community Heritage Financial has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500.

Dividends

First Mid Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. Community Heritage Financial pays an annual dividend of $0.32 per share and has a dividend yield of 0.9%. First Mid Bancshares pays out 25.2% of its earnings in the form of a dividend. Community Heritage Financial pays out 9.8% 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 Mid Bancshares has increased its dividend for 3 consecutive years. First Mid Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares First Mid Bancshares and Community Heritage Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Mid Bancshares	19.95%	10.44%	1.23%
Community Heritage Financial	N/A	N/A	N/A

Earnings & Valuation

This table compares First Mid Bancshares and Community Heritage Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Mid Bancshares	$466.04 million	2.77	$91.75 million	$3.97	12.21
Community Heritage Financial	$60.49 million	1.74	$9.65 million	$3.27	10.90

First Mid Bancshares has higher revenue and earnings than Community Heritage Financial. Community Heritage Financial is trading at a lower price-to-earnings ratio than First Mid Bancshares, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for First Mid Bancshares and Community Heritage Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Mid Bancshares	0	3	3	0	2.50
Community Heritage Financial	0	0	0	0	0.00

First Mid Bancshares currently has a consensus target price of $49.50, suggesting a potential upside of 2.15%. Given First Mid Bancshares’ stronger consensus rating and higher possible upside, equities research analysts clearly believe First Mid Bancshares is more favorable than Community Heritage Financial.

Insider and Institutional Ownership

47.6% of First Mid Bancshares shares are held by institutional investors. Comparatively, 12.2% of Community Heritage Financial shares are held by institutional investors. 6.0% of First Mid Bancshares shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

First Mid Bancshares beats Community Heritage Financial on 16 of the 17 factors compared between the two stocks.

About First Mid Bancshares

First Mid Bancshares, Inc., a financial holding company, provides community banking products and services to commercial, retail, and agricultural customers in the United States. It accepts various deposit products, such as demand deposits, savings accounts, money market deposits, and time deposits. The company’s loan products include commercial real estate, commercial and industrial, agricultural and agricultural real estate, residential real estate, and consumer loans, as well as construction and land development, 1-4 family residential properties, and multifamily residential properties loans; and other loans comprising loans to municipalities to support community projects, such as infrastructure improvements or equipment purchases. It also offers wealth management services, which include estate planning, investment, and farm management and brokerage services for individuals; employee benefit services for businesses; and farm management and brokerage services. In addition, the company provides property and casualty, senior insurance products, and group medical insurance for businesses; and personal lines insurance to individuals. The company was formerly known as First Mid-Illinois Bancshares, Inc. and changed its name to First Mid Bancshares, Inc. in April 2019. First Mid Bancshares, Inc. was founded in 1865 and is headquartered in Mattoon, Illinois.

About Community Heritage Financial

Community Heritage Financial, Inc. operates as the bank holding company for Middletown Valley Bank that provides retail and commercial banking services to individuals and businesses in Frederick and Washington counties in Maryland and Franklin County, Pennsylvania. Its primary deposit products include demand, savings, and time deposits, as well as lending products comprise real estate mortgages, commercial business loans, and instalment loans. The company also offers mortgage financing, new home purchases, refinancing, and construction lending in Middletown, Crofton, and Oakland, Maryland. The company was founded in 1908 and is based in Middletown, Maryland.