Northeast Bank (NASDAQ:NBN) versus Chemung Financial (NASDAQ:CHMG) Critical Comparison

Chemung Financial (NASDAQ:CHMG) and Northeast Bank (NASDAQ:NBN) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Chemung Financial and Northeast Bank, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chemung Financial	0	1	0	0	2.00
Northeast Bank	0	0	1	0	3.00

Chemung Financial presently has a consensus price target of $49.00, indicating a potential upside of 13.48%. Northeast Bank has a consensus price target of $54.00, indicating a potential downside of 1.12%. Given Chemung Financial’s higher possible upside, equities analysts plainly believe Chemung Financial is more favorable than Northeast Bank.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chemung Financial	17.35%	12.67%	0.85%
Northeast Bank	21.73%	N/A	N/A

Risk & Volatility

Chemung Financial has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, Northeast Bank has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500.

Institutional & Insider Ownership

47.5% of Chemung Financial shares are held by institutional investors. 12.0% of Chemung Financial shares are held by company insiders. Comparatively, 14.2% of Northeast Bank shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Chemung Financial and Northeast Bank’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chemung Financial	$96.31 million	2.13	$25.00 million	$5.22	8.27
Northeast Bank	$182.43 million	N/A	$44.19 million	$7.30	7.48

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

Dividends

Chemung Financial pays an annual dividend of $1.24 per share and has a dividend yield of 2.9%. Northeast Bank pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Chemung Financial pays out 23.8% of its earnings in the form of a dividend. Northeast Bank pays out 0.5% 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.

Summary

Northeast Bank beats Chemung Financial on 9 of the 15 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 Northeast Bank

Northeast Bank provides banking services to individual and corporate customers in Maine. The company's deposit products include demand deposit, NOW, money market, savings, certificate of deposit, and individual retirement accounts, as well as checking accounts. Its loan portfolio comprises residential mortgage loans; multi-family and other commercial real estate loans; commercial and industrial loans, such as term loans, lines of credit and equipment, and receivables financing; consumer loans comprising mobile home and overdraft, and deposit-secured loans; and small business administration loans. In addition, the company offers telephone banking, online banking and bill payment, mobile banking, cash management, and remote deposit capture services, as well as debit and credit card, ATM, electronic transfer, and check services. Further, it provides various services, such as money market, merchant, and payroll and HR. Northeast Bank was founded in 1872 and is headquartered in Portland, Maine.