First Defiance Financial Corp. (NASDAQ: FDEF) and CoBiz Financial (NASDAQ:COBZ) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, earnings, valuation and risk.

Dividends

First Defiance Financial Corp. pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. CoBiz Financial pays an annual dividend of $0.22 per share and has a dividend yield of 1.1%. First Defiance Financial Corp. pays out 33.9% of its earnings in the form of a dividend. CoBiz Financial pays out 24.7% 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.

Earnings and Valuation

This table compares First Defiance Financial Corp. and CoBiz Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Defiance Financial Corp. $121.81 million 4.37 $29.94 million $2.95 17.79
CoBiz Financial $156.65 million 5.19 $36.81 million $0.89 22.07

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

Risk & Volatility

First Defiance Financial Corp. has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, CoBiz Financial has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for First Defiance Financial Corp. and CoBiz Financial, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Defiance Financial Corp. 0 1 1 0 2.50
CoBiz Financial 0 3 2 0 2.40

First Defiance Financial Corp. currently has a consensus price target of $54.50, suggesting a potential upside of 3.83%. CoBiz Financial has a consensus price target of $18.83, suggesting a potential downside of 4.11%. Given First Defiance Financial Corp.’s stronger consensus rating and higher probable upside, analysts clearly believe First Defiance Financial Corp. is more favorable than CoBiz Financial.

Profitability

This table compares First Defiance Financial Corp. and CoBiz Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Defiance Financial Corp. 20.85% 9.35% 1.13%
CoBiz Financial 21.97% 12.09% 1.02%

Insider & Institutional Ownership

63.9% of First Defiance Financial Corp. shares are owned by institutional investors. Comparatively, 82.9% of CoBiz Financial shares are owned by institutional investors. 3.4% of First Defiance Financial Corp. shares are owned by insiders. Comparatively, 9.9% of CoBiz Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

CoBiz Financial beats First Defiance Financial Corp. on 11 of the 16 factors compared between the two stocks.

About First Defiance Financial Corp.

First Defiance Financial Corp. is a unitary thrift holding company that focuses on traditional banking and property and casualty, life and group health insurance products. The Company operates through its subsidiaries, First Federal Bank of the Midwest (First Federal or the Bank), First Insurance Group of the Midwest, Inc. (First Insurance) and First Defiance Risk Management Inc. (First Defiance Risk Management). First Federal is a federally chartered stock savings bank. First Federal’s banking activities include originating and servicing residential, commercial, and consumer loans, and providing a range of depository, trust and wealth management services. First Insurance offers property and casualty, and group health and life insurance products. First Defiance Risk Management is an insurance company subsidiary of the Company to insure the Company and its subsidiaries against certain risks to the operations of the Company.

About CoBiz Financial

CoBiz Financial Inc. is a financial holding company. The Company provides a range of banking and related services through its subsidiaries, CoBiz Bank (Bank), CoBiz Insurance, Inc. and CoBiz IM, Inc. (CoBiz IM). The Company’s segments include Commercial Banking, Fee-Based Lines, and Corporate Support and Other. Its Commercial Banking segment consists of the operations of the Bank, a full-service business banking institution that offers commercial, real estate and private banking, as well as treasury management, interest-rate hedging and depository products. Its Fee-Based Lines segment consists of the operations of CoBiz Wealth, LLC and CoBiz Insurance, Inc. CoBiz Wealth, LLC provides investment management advisory services to individuals, families and businesses. CoBiz Insurance, Inc. offers property and casualty (P&C) and employee benefit group insurance (EB) broker agency to small to mid-sized employers, commercial enterprises and individual lines to their owners.

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