Critical Analysis: CB Financial Services (NASDAQ:CBFV) & LCNB (NASDAQ:LCNB)

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

Dividends

CB Financial Services pays an annual dividend of $1.12 per share and has a dividend yield of 2.9%. LCNB pays an annual dividend of $0.88 per share and has a dividend yield of 5.0%. 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. LCNB pays out 54.7% of its earnings in the form of a dividend. LCNB has increased its dividend for 7 consecutive years. LCNB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for CB Financial Services and LCNB, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CB Financial Services	0	2	2	0	2.50
LCNB	0	0	1	0	3.00

CB Financial Services presently has a consensus price target of $41.00, suggesting a potential upside of 7.72%. Given CB Financial Services’ higher probable upside, analysts plainly believe CB Financial Services is more favorable than LCNB.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CB Financial Services	$80.52 million	2.40	$4.90 million	$1.29	29.50
LCNB	$124.52 million	2.01	$23.12 million	$1.61	10.89

LCNB has higher revenue and earnings than CB Financial Services. LCNB 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.

Institutional & Insider Ownership

33.1% of CB Financial Services shares are owned by institutional investors. Comparatively, 34.7% of LCNB shares are owned by institutional investors. 10.2% of CB Financial Services shares are owned by insiders. Comparatively, 5.7% of LCNB shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

CB Financial Services has a beta of 0.28, indicating that its share price is 72% less volatile than the S&P 500. Comparatively, LCNB has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CB Financial Services	8.32%	10.07%	1.00%
LCNB	18.50%	8.48%	1.02%

Summary

LCNB beats CB Financial Services on 11 of the 17 factors compared between the two stocks.

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.

About LCNB

LCNB Corp. operates as the financial holding company for LCNB National Bank that provides banking services in Ohio. Its deposit products include checking accounts, demand deposits, savings accounts, NOW and money market deposits, as well as individual retirement accounts and time certificates. The company's loan products comprise commercial and industrial, commercial and residential real estate, agricultural, construction, and small business administration loans; and residential mortgage loans that consists of loans for purchasing or refinancing personal residences, home equity lines of credit, and loans for commercial or consumer purposes secured by residential mortgages. It offers consumer loans, such as automobile, recreational vehicles, boat, home improvement, and personal loans. In addition, the company provides trust administration, estate settlement, and fiduciary services; and investment management services for trusts, agency accounts, individual retirement accounts, and foundations/endowments. Further, it offers investment services and products, including financial needs analysis, mutual funds, securities trading, annuities, and life insurance; and security brokerage services. Additionally, the company provides safe deposit boxes, night depositories, cashier's checks, bank-by-mail, ATMs, cash and transaction services, debit cards, wire transfers, electronic funds transfer, utility bill collections, notary public service, cash management services, telephone banking, PC Internet banking, mobile banking, and other services for individuals and businesses. LCNB Corp. was founded in 1877 and is headquartered in Lebanon, Ohio.