Avidia Bancorp (NYSE:AVBC) vs. Chemung Financial (NASDAQ:CHMG) Critical Review

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

Insider and Institutional Ownership

47.5% of Chemung Financial shares are owned by institutional investors. 12.7% of Chemung Financial shares are owned by insiders. Comparatively, 3.4% of Avidia Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for Chemung Financial and Avidia Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chemung Financial	0	1	2	1	3.00
Avidia Bancorp	1	0	0	1	2.50

Chemung Financial presently has a consensus price target of $84.00, indicating a potential downside of 1.16%. Given Chemung Financial’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Chemung Financial is more favorable than Avidia Bancorp.

Profitability

This table compares Chemung Financial and Avidia Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chemung Financial	20.68%	12.98%	1.22%
Avidia Bancorp	11.51%	4.62%	0.63%

Earnings and Valuation

This table compares Chemung Financial and Avidia Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chemung Financial	$140.78 million	2.91	$15.10 million	$6.96	12.21
Avidia Bancorp	$111.19 million	4.00	-$3.29 million	$0.95	23.42

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

Dividends

Chemung Financial pays an annual dividend of $1.36 per share and has a dividend yield of 1.6%. Avidia Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Chemung Financial pays out 19.5% of its earnings in the form of a dividend. Avidia Bancorp pays out 25.3% 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. Chemung Financial has raised its dividend for 1 consecutive years. Chemung Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Chemung Financial beats Avidia Bancorp on 14 of the 16 factors compared between the two stocks.

About Chemung Financial

Chemung Financial Corporation operates as a bank holding company for Chemung Canal Trust Company that provides a range of banking, financing, fiduciary, and other financial services. The company provides demand, savings, and time deposits; non-interest and interest-bearing checking accounts; and insured money market accounts. It also offers commercial and agricultural loans comprising loans to small to mid-sized businesses; commercial and residential mortgage loans; and consumer loans, including home equity lines of credit and home equity term loans. In addition, the company provides interest rate swaps, letters of credit, employee benefit plans, insurance products, mutual fund, brokerage, and tax preparation services. Further, it offers guardian, custodian, trustee, investment, pension, estate planning, and employee benefit administrative services, as well as acts as an agent for pension, profit-sharing, and other employee benefit trusts. Chemung Financial Corporation was founded in 1833 and is headquartered in Elmira, New York.

About Avidia Bancorp

Avidia Bancorp Inc. is a chartered stock savings bank. It operates full-service banking offices principally in western Middlesex County and eastern Worcester County, in Massachusetts. Avidia Bancorp Inc. is based in HUDSON, Mass.