Head-To-Head Analysis: Citizens & Northern (NASDAQ:CZNC) and MainStreet Bancshares (NASDAQ:MNSB)

MainStreet Bancshares (NASDAQ:MNSB) and Citizens & Northern (NASDAQ:CZNC) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Profitability

This table compares MainStreet Bancshares and Citizens & Northern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MainStreet Bancshares	8.34%	5.77%	0.54%
Citizens & Northern	14.47%	8.28%	0.86%

Dividends

MainStreet Bancshares pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. Citizens & Northern pays an annual dividend of $1.12 per share and has a dividend yield of 5.8%. MainStreet Bancshares pays out 33.3% of its earnings in the form of a dividend. Citizens & Northern pays out 77.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership

52.3% of MainStreet Bancshares shares are held by institutional investors. Comparatively, 30.8% of Citizens & Northern shares are held by institutional investors. 9.2% of MainStreet Bancshares shares are held by insiders. Comparatively, 3.7% of Citizens & Northern shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for MainStreet Bancshares and Citizens & Northern, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MainStreet Bancshares	0	0	0	0	0.00
Citizens & Northern	0	1	0	0	2.00

Valuation and Earnings

This table compares MainStreet Bancshares and Citizens & Northern”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MainStreet Bancshares	$127.76 million	1.00	$26.58 million	$1.20	14.03
Citizens & Northern	$137.92 million	2.15	$24.15 million	$1.44	13.37

MainStreet Bancshares has higher earnings, but lower revenue than Citizens & Northern. Citizens & Northern is trading at a lower price-to-earnings ratio than MainStreet Bancshares, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

MainStreet Bancshares has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, Citizens & Northern has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500.

Summary

Citizens & Northern beats MainStreet Bancshares on 8 of the 14 factors compared between the two stocks.

About MainStreet Bancshares

MainStreet Bancshares, Inc. operates as the bank holding company for MainStreet Bank that provides various banking products and services for individuals, small to medium-sized businesses, and professional service organizations. The company offers demand, NOW, money market, savings, and sweep accounts, as well as certificates of deposit; business and consumer checking, interest-bearing checking, business account analysis, and other depository services; and cash management, wire transfer, check imaging, bill pay, remote deposit capture, and courier services. It also provides commercial loans, include government contract receivables, plant and equipment, general working capital, contract administration, and acquisition loans; commercial real estate, real estate construction, and residential real estate loans; and consumer loans comprising term loans and overdraft protection, as well as debit and credit cards. In addition, the company offers deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. It operates in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as automated teller machines. The company was incorporated in 2003 and is headquartered in Fairfax, Virginia.

About Citizens & Northern

Citizens & Northern Corp. is a holding company, which engages in community banking. It provides a full range of banking and mortgage services to individual and corporate customers in North Central Pennsylvania and Southern New York State. The firm’s lending products include mortgage loans, commercial loans, and consumer loans. Its deposit products include various types of checking accounts, passbook and statement savings, money market accounts, interest checking accounts, individual retirement accounts, and certificates of deposit. The company was founded in 1864 and is headquartered in Wellsboro, PA.