Lake Shore Bancorp (NASDAQ:LSBK – Get Free Report) and Hawthorn Bancshares (NASDAQ:HWBK – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.
Earnings and Valuation
This table compares Lake Shore Bancorp and Hawthorn Bancshares”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lake Shore Bancorp | $39.56 million | 3.69 | $7.27 million | $1.13 | 16.45 |
| Hawthorn Bancshares | $111.97 million | 2.44 | $23.80 million | $3.82 | 10.35 |
Insider and Institutional Ownership
8.7% of Lake Shore Bancorp shares are owned by institutional investors. Comparatively, 30.7% of Hawthorn Bancshares shares are owned by institutional investors. 8.4% of Lake Shore Bancorp shares are owned by company insiders. Comparatively, 22.9% of Hawthorn Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Lake Shore Bancorp and Hawthorn Bancshares’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lake Shore Bancorp | 20.74% | 5.91% | 1.15% |
| Hawthorn Bancshares | 22.77% | 15.15% | 1.42% |
Dividends
Lake Shore Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 1.9%. Hawthorn Bancshares pays an annual dividend of $0.84 per share and has a dividend yield of 2.1%. Lake Shore Bancorp pays out 31.9% of its earnings in the form of a dividend. Hawthorn Bancshares pays out 22.0% 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. Hawthorn Bancshares has raised its dividend for 5 consecutive years. Hawthorn Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
Lake Shore Bancorp has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, Hawthorn Bancshares has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and target prices for Lake Shore Bancorp and Hawthorn Bancshares, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lake Shore Bancorp | 0 | 0 | 1 | 0 | 3.00 |
| Hawthorn Bancshares | 0 | 0 | 1 | 0 | 3.00 |
Summary
Hawthorn Bancshares beats Lake Shore Bancorp on 12 of the 14 factors compared between the two stocks.
About Lake Shore Bancorp
Lake Shore Bancorp, Inc. operates as a savings and loan holding company for Lake Shore Servings Bank. It offers personal services such as checking, savings, lending, banking, debit card, e-services, and online banking; and business services including deposit products, commercial loans, and business e-statements. The company was founded in 2006 and is headquartered in Dunkirk, NY.
About Hawthorn Bancshares
Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.
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