Financial Survey: Bank of America (NYSE:BAC) versus CNB Financial (NASDAQ:CCNE)

CNB Financial (NASDAQ:CCNE) and Bank of America (NYSE:BAC) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.

Dividends

CNB Financial pays an annual dividend of $0.76 per share and has a dividend yield of 2.2%. Bank of America pays an annual dividend of $1.28 per share and has a dividend yield of 2.0%. CNB Financial pays out 24.4% of its earnings in the form of a dividend. Bank of America pays out 29.4% 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. CNB Financial has increased its dividend for 1 consecutive years and Bank of America has increased its dividend for 11 consecutive years. CNB Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares CNB Financial and Bank of America”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CNB Financial	$432.51 million	2.35	$66.13 million	$3.11	11.04
Bank of America	$191.57 billion	2.29	$30.51 billion	$4.36	14.41

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

Analyst Ratings

This is a summary of current ratings and price targets for CNB Financial and Bank of America, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNB Financial	0	2	3	1	2.83
Bank of America	0	6	21	0	2.78

CNB Financial presently has a consensus target price of $36.75, suggesting a potential upside of 7.03%. Bank of America has a consensus target price of $64.08, suggesting a potential upside of 2.00%. Given CNB Financial’s stronger consensus rating and higher possible upside, equities analysts plainly believe CNB Financial is more favorable than Bank of America.

Profitability

This table compares CNB Financial and Bank of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CNB Financial	19.37%	12.85%	1.26%
Bank of America	17.56%	12.20%	0.98%

Insider and Institutional Ownership

52.3% of CNB Financial shares are owned by institutional investors. Comparatively, 70.7% of Bank of America shares are owned by institutional investors. 2.9% of CNB Financial shares are owned by insiders. Comparatively, 0.3% of Bank of America shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

CNB Financial has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Bank of America has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Summary

CNB Financial beats Bank of America on 10 of the 18 factors compared between the two stocks.

About CNB Financial

CNB Financial Corporation operates as the bank holding company for CNB Bank that provides a range of banking products and services for individual, business, governmental, and institutional customers. The company accepts checking, savings, and time deposit accounts; and offers real estate, commercial, industrial, residential, and consumer loans, as well as various other specialized financial services. It also provides private banking; and wealth and asset management services, including the administration of trusts and estates, retirement plans, and other employee benefit plans, as well as a range of wealth management services. In addition, the company invests in debt and equity securities; sells nonproprietary annuities and other insurance products; and offers small balance unsecured loans and secured loans primarily collateralized by automobiles and equipment, as well as engages in consumer discount loan and finance business. The company was founded in 1865 and is headquartered in Clearfield, Pennsylvania.

About Bank of America

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in four segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets. The Consumer Banking segment offers traditional and money market savings accounts, certificates of deposit and IRAs, non-interest and interest-bearing checking accounts, and investment accounts and products; credit and debit cards; residential mortgages, and home equity loans; and direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The GWIM segment provides investment management, brokerage, banking, and trust and retirement products and services; wealth management solutions; and customized solutions, including specialty asset management services. The Global Banking segment offers lending products and services, including commercial loans, leases, commitment facilities, trade finance, and commercial real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, short-term investing options, and merchant services; working capital management solutions; debt and equity underwriting and distribution, and merger-related and other advisory services; and fixed-income and equity research, and certain market-based services. The Global Markets segment provides market-making, financing, securities clearing, settlement, and custody services; securities and derivative products; and risk management products using interest rate, equity, credit, currency and commodity derivatives, foreign exchange, fixed-income, and mortgage-related products. Bank of America Corporation was founded in 1784 and is based in Charlotte, North Carolina.