Critical Review: Citizens & Northern (NASDAQ:CZNC) and SR Bancorp (NASDAQ:SRBK)

SR Bancorp (NASDAQ:SRBK) and Citizens & Northern (NASDAQ:CZNC) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, risk, profitability, valuation and dividends.

Volatility & Risk

SR Bancorp has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Citizens & Northern has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for SR Bancorp and Citizens & Northern, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SR Bancorp	0	2	0	0	2.00
Citizens & Northern	0	4	0	0	2.00

SR Bancorp presently has a consensus target price of $16.00, suggesting a potential upside of 1.65%. Citizens & Northern has a consensus target price of $22.00, suggesting a potential upside of 9.07%. Given Citizens & Northern’s higher possible upside, analysts plainly believe Citizens & Northern is more favorable than SR Bancorp.

Valuation and Earnings

This table compares SR Bancorp and Citizens & Northern”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SR Bancorp	$48.54 million	2.77	$5.14 million	$0.37	42.54
Citizens & Northern	$157.29 million	2.28	$25.96 million	$1.76	11.46

Citizens & Northern has higher revenue and earnings than SR Bancorp. Citizens & Northern is trading at a lower price-to-earnings ratio than SR Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

SR Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Citizens & Northern pays an annual dividend of $1.12 per share and has a dividend yield of 5.6%. SR Bancorp pays out 54.1% of its earnings in the form of a dividend. Citizens & Northern pays out 63.6% 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.

Insider & Institutional Ownership

24.7% of SR Bancorp shares are owned by institutional investors. Comparatively, 30.8% of Citizens & Northern shares are owned by institutional investors. 7.8% of SR Bancorp shares are owned by company insiders. Comparatively, 4.5% of Citizens & Northern shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares SR Bancorp and Citizens & Northern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SR Bancorp	6.28%	1.42%	0.26%
Citizens & Northern	16.81%	9.75%	1.06%

Summary

Citizens & Northern beats SR Bancorp on 10 of the 14 factors compared between the two stocks.

About SR Bancorp

SR Bancorp, Inc. operates as the holding company for Somerset Regal Bank that provides customary retail and commercial banking services to individuals, businesses, and local municipalities in the communities of Somerset, Middlesex, Hunterdon, and Essex counties in New Jersey. It offers deposit instruments, including noninterest-bearing demand deposits, interest-bearing demand accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides loans comprising one- to four family-residential mortgage loans, home equity loans and lines of credit, unsecured personal loans, and rehabilitation loans; and bill payment services. In addition, it is involved in the investment activities. The company was founded in 1887 and is headquartered in Bound Brook, New Jersey.

About Citizens & Northern

Citizens & Northern Corp. is a holding company, which engages in community banking. It provides a full range of banking and mortgage services to individual and corporate customers in North Central Pennsylvania and Southern New York State. The firm’s lending products include mortgage loans, commercial loans, and consumer loans. Its deposit products include various types of checking accounts, passbook and statement savings, money market accounts, interest checking accounts, individual retirement accounts, and certificates of deposit. The company was founded in 1864 and is headquartered in Wellsboro, PA.