Contrasting Northeast Bancorp (NASDAQ:NBN) and CF Bankshares (NASDAQ:CFBK)

Northeast Bancorp (NASDAQ:NBN) and CF Bankshares (NASDAQ:CFBK) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Northeast Bancorp and CF Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northeast Bancorp	0	1	2	0	2.67
CF Bankshares	0	0	2	0	3.00

Northeast Bancorp presently has a consensus price target of $143.50, suggesting a potential upside of 14.86%. CF Bankshares has a consensus price target of $40.00, suggesting a potential upside of 15.64%. Given CF Bankshares’ stronger consensus rating and higher possible upside, analysts clearly believe CF Bankshares is more favorable than Northeast Bancorp.

Profitability

This table compares Northeast Bancorp and CF Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northeast Bancorp	28.34%	20.02%	2.25%
CF Bankshares	18.08%	11.92%	1.05%

Dividends

Northeast Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. CF Bankshares pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. Northeast Bancorp pays out 0.3% of its earnings in the form of a dividend. CF Bankshares pays out 10.4% 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. CF Bankshares has raised its dividend for 4 consecutive years. CF Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Northeast Bancorp has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, CF Bankshares has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.

Valuation & Earnings

This table compares Northeast Bancorp and CF Bankshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Bancorp	$222.55 million	4.61	$107.48 million	$13.47	9.27
CF Bankshares	$63.01 million	3.52	$17.54 million	$3.46	10.00

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

Institutional and Insider Ownership

41.1% of CF Bankshares shares are held by institutional investors. 14.2% of Northeast Bancorp shares are held by insiders. Comparatively, 17.7% of CF Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Northeast Bancorp beats CF Bankshares on 9 of the 16 factors compared between the two stocks.

About Northeast Bancorp

Northeast Bank provides banking services to individual and corporate customers in Maine. The company's deposit products include demand deposit, NOW, money market, savings, certificate of deposit, and individual retirement accounts, as well as checking accounts. Its loan portfolio comprises residential mortgage loans; multi-family and other commercial real estate loans; commercial and industrial loans, such as term loans, lines of credit and equipment, and receivables financing; consumer loans comprising mobile home and overdraft, and deposit-secured loans; and small business administration loans. In addition, the company offers telephone banking, online banking and bill payment, mobile banking, cash management, and remote deposit capture services, as well as debit and credit card, ATM, electronic transfer, and check services. Further, it provides various services, such as money market, merchant, and payroll and HR. Northeast Bank was founded in 1872 and is headquartered in Portland, Maine.

About CF Bankshares

CF Bankshares Inc. operates as the bank holding company for CFBank, National Association that provides various banking products and services in the United States. The company accepts savings, retail and business checking accounts, and money market accounts, as well as certificates of deposit. It offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans and equipment leases; residential real estate loans and treasury management depository services; retail banking services and products. In addition, the company offers consumer loans, such as home equity lines of credit, home improvement loans, and loans secured by deposits and purchased loans, as well as other loans. Further, it provides online internet banking, mobile banking, and remote deposits. The company was formerly known as Central Federal Corporation and changed its name to CF Bankshares Inc. in July 2020. CF Bankshares Inc. was founded in 1892 and is based in Columbus, Ohio.