Community Financial System (NYSE:CBU) & Chiba Bank (OTCMKTS:CHBAY) Critical Analysis

Chiba Bank (OTCMKTS:CHBAY) and Community Financial System (NYSE:CBU) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Chiba Bank and Community Financial System, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chiba Bank	0	0	0	1	4.00
Community Financial System	0	4	1	1	2.50

Community Financial System has a consensus price target of $71.50, suggesting a potential upside of 11.88%. Given Community Financial System’s higher possible upside, analysts plainly believe Community Financial System is more favorable than Chiba Bank.

Profitability

This table compares Chiba Bank and Community Financial System’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chiba Bank	20.96%	8.25%	0.49%
Community Financial System	21.79%	11.47%	1.32%

Institutional & Insider Ownership

73.8% of Community Financial System shares are held by institutional investors. 1.1% of Community Financial System shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Chiba Bank and Community Financial System”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chiba Bank	$2.96 billion	4.73	$620.82 million	$4.72	19.12
Community Financial System	$1.01 billion	3.33	$210.46 million	$4.31	14.83

Chiba Bank has higher revenue and earnings than Community Financial System. Community Financial System is trading at a lower price-to-earnings ratio than Chiba Bank, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Chiba Bank has a beta of 0.1, meaning that its stock price is 90% less volatile than the S&P 500. Comparatively, Community Financial System has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Dividends

Chiba Bank pays an annual dividend of $1.23 per share and has a dividend yield of 1.4%. Community Financial System pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Chiba Bank pays out 26.1% of its earnings in the form of a dividend. Community Financial System pays out 43.6% 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. Community Financial System has increased its dividend for 33 consecutive years. Community Financial System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Community Financial System beats Chiba Bank on 10 of the 17 factors compared between the two stocks.

About Chiba Bank

The Chiba Bank, Ltd., together with its subsidiaries, provides banking products and services in Japan and internationally. The company offers various deposit products, including savings, time deposits, currency deposits, investment trusts, bonds, and pensions; loans, which include mortgages, renovation loans, photovoltaic, vehicle, education, and other loan products; and insurance products, such as annuity, life, medical, student, death, and travel insurance. It also offers debit and credit cards, as well as internet banking services. In addition, the company engages in securities, investment management and advisory, software development, commissioned computation tasks, research and investigation of IT and financial technologies, leasing, operation, and management of investment funds, mergers and acquisition advisory, credit guarantee businesses, management and collection of claims businesses. Further, it provides loan guarantees and fee collection services; accounting, general administration entrustment, and temporary staff services; and is involved in outsourcing of operational business. Additionally, it rents and maintains office buildings and welfare facilities; provides research, survey, and consulting services; purchases and sells supplies and consumer goods; and engages in renewable energy generation. The company serves individuals and corporations. The Chiba Bank, Ltd. was incorporated in 1943 and is headquartered in Chiba City, Japan.

About Community Financial System

Community Bank System, Inc. operates as the bank holding company for Community Bank, N.A. that provides various banking and other financial services to retail, commercial, institutional, and municipal customers. It operates through three segments: Banking, Employee Benefit Services, and All Other. The company offers various deposits products, such as interest and noninterest -bearing checking, savings, and money market deposit accounts, as well as time deposits. It also provides loans, including consumer mortgages; general purpose commercial and industrial loans, and mortgages on commercial properties; paycheck protection program loans; installment loans that are originated through selected dealerships and are secured by automobiles, marine, and other recreational vehicles; personal installment loans and check credit lines of credit for consumers; and home equity products. In addition, the company offers broker-dealer and investment advisory; cash management, investment, and treasury services; asset management services; and employee benefit services, as well as operates as a full-service insurance agency that provides personal and commercial lines of insurance, and other risk management products and services. Further, it offers contribution plan administration, employee benefit trust, collective investment fund, retirement plan administration and benefit consulting, fund administration, transfer agency, actuarial and benefit consulting, and health and welfare consulting services; and act as an investor in residential and commercial real estate activities. Additionally, the company offers wealth management, retirement planning, higher educational planning, fiduciary, risk management, trust, and personal financial planning services; and investment alternatives, including stocks, bonds, mutual funds, and insurance and advisory products, as well as master recordkeeping services. Community Bank System, Inc. was founded in 1866 and is headquartered in DeWitt, New York.