Contrasting City (NASDAQ:CHCO) and Truxton (OTCMKTS:TRUX)

Truxton (OTCMKTS:TRUX) and City (NASDAQ:CHCO) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Profitability

This table compares Truxton and City’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Truxton	24.00%	N/A	N/A
City	32.72%	16.58%	1.96%

Analyst Ratings

This is a summary of current recommendations and price targets for Truxton and City, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Truxton	0	0	0	0	0.00
City	0	5	1	0	2.17

City has a consensus target price of $134.25, indicating a potential downside of 0.44%. Given City’s stronger consensus rating and higher possible upside, analysts clearly believe City is more favorable than Truxton.

Insider and Institutional Ownership

0.3% of Truxton shares are held by institutional investors. Comparatively, 72.4% of City shares are held by institutional investors. 1.8% of City shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk & Volatility

Truxton has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, City has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Valuation & Earnings

This table compares Truxton and City”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Truxton	$92.29 million	3.04	$21.48 million	$8.04	12.08
City	$398.98 million	4.77	$130.49 million	$9.08	14.85

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

Dividends

Truxton pays an annual dividend of $3.52 per share and has a dividend yield of 3.6%. City pays an annual dividend of $3.48 per share and has a dividend yield of 2.6%. Truxton pays out 43.8% of its earnings in the form of a dividend. City pays out 38.3% 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. City has raised its dividend for 6 consecutive years.

Summary

City beats Truxton on 15 of the 17 factors compared between the two stocks.

About Truxton

Truxton Corporation, through its subsidiaries, provides various banking, investment management, and trust administration services to individuals, businesses, and charitable institutions in the United States. The company offers deposit products, including demand, money market accounts, and certificates of deposit. It also provides lending products, such as residential and commercial real estate mortgages, commercial loans, construction and land development loans, commercial and industrial loans, operating lines of credit, and loans to individual. In addition, the company offers strategic and capital advisory services, business banking, and treasury management services; and insurance products. The company was formerly known as NBT Holdings Inc. and changed its name to Truxton Corporation in May 2013. Truxton Corporation was founded in 2004 and is based in Nashville, Tennessee.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.