Financial Analysis: Hanover Bancorp (NASDAQ:HNVR) versus CB Financial Services (NASDAQ:CBFV)

Hanover Bancorp (NASDAQ:HNVR) and CB Financial Services (NASDAQ:CBFV) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.

Volatility & Risk

Hanover Bancorp has a beta of 0.12, meaning that its share price is 88% less volatile than the S&P 500. Comparatively, CB Financial Services has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500.

Dividends

Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.7%. CB Financial Services pays an annual dividend of $1.12 per share and has a dividend yield of 3.2%. Hanover Bancorp pays out 38.1% of its earnings in the form of a dividend. CB Financial Services pays out 86.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Hanover Bancorp and CB Financial Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hanover Bancorp	$143.32 million	1.16	$7.49 million	$1.05	22.14
CB Financial Services	$44.14 million	4.02	$4.90 million	$1.29	27.10

Hanover Bancorp has higher revenue and earnings than CB Financial Services. Hanover Bancorp is trading at a lower price-to-earnings ratio than CB Financial Services, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Hanover Bancorp and CB Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hanover Bancorp	5.53%	5.10%	0.43%
CB Financial Services	8.32%	10.16%	1.01%

Insider and Institutional Ownership

15.0% of Hanover Bancorp shares are owned by institutional investors. Comparatively, 33.1% of CB Financial Services shares are owned by institutional investors. 23.9% of Hanover Bancorp shares are owned by company insiders. Comparatively, 10.2% of CB Financial Services shares are owned 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.

Analyst Ratings

This is a summary of recent recommendations for Hanover Bancorp and CB Financial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hanover Bancorp	1	3	1	0	2.00
CB Financial Services	1	1	2	0	2.25

Hanover Bancorp presently has a consensus target price of $24.33, suggesting a potential upside of 4.66%. CB Financial Services has a consensus target price of $41.00, suggesting a potential upside of 17.28%. Given CB Financial Services’ stronger consensus rating and higher possible upside, analysts clearly believe CB Financial Services is more favorable than Hanover Bancorp.

Summary

CB Financial Services beats Hanover Bancorp on 12 of the 16 factors compared between the two stocks.

About Hanover Bancorp

Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.

About CB Financial Services

CB Financial Services, Inc. operates as the bank holding company for Community Bank that provides various banking products and services for individuals and businesses in southwestern Pennsylvania, West Virginia, and Ohio. The company's primary deposit products include demand deposits, NOW accounts, money market accounts, and savings accounts, as well as time deposit products. Its loan products comprise residential real estate loans, such as one- to four-family mortgage loans, home equity installment loans, and home equity lines of credit; commercial real estate loans that are secured primarily by improved properties, such as retail facilities, office buildings, and other non-residential buildings; construction loans to individuals to finance the construction of residential dwellings, as well as for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses; commercial and industrial loans, and lines of credit; consumer loans consisting of indirect auto loans, secured and unsecured loans, and lines of credit; and other loans. In addition, the company conducts insurance agency activities by offering property and casualty, commercial liability, surety, and other insurance products. The company was founded in 1901 and is headquartered in Carmichaels, Pennsylvania.