Chemical Financial Corporation (NASDAQ: CHFC) and Suffolk Bancorp (NYSE:SCNB) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.

Profitability

This table compares Chemical Financial Corporation and Suffolk Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chemical Financial Corporation 22.28% 7.32% 1.07%
Suffolk Bancorp 18.59% 6.97% 0.70%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Chemical Financial Corporation and Suffolk Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chemical Financial Corporation 0 1 5 0 2.83
Suffolk Bancorp 0 1 0 0 2.00

Chemical Financial Corporation currently has a consensus price target of $55.80, suggesting a potential upside of 26.65%. Suffolk Bancorp has a consensus price target of $43.00, suggesting a potential upside of 6.41%. Given Chemical Financial Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe Chemical Financial Corporation is more favorable than Suffolk Bancorp.

Earnings & Valuation

This table compares Chemical Financial Corporation and Suffolk Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Chemical Financial Corporation $630.88 million 4.97 $161.50 million $2.27 19.41
Suffolk Bancorp N/A N/A N/A $1.66 24.34

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

Institutional and Insider Ownership

76.5% of Chemical Financial Corporation shares are held by institutional investors. Comparatively, 58.8% of Suffolk Bancorp shares are held by institutional investors. 2.2% of Chemical Financial Corporation shares are held by insiders. Comparatively, 4.6% of Suffolk Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Chemical Financial Corporation has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Suffolk Bancorp has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Dividends

Chemical Financial Corporation pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. Suffolk Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Chemical Financial Corporation pays out 49.3% of its earnings in the form of a dividend. Suffolk Bancorp pays out 24.1% 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

Chemical Financial Corporation beats Suffolk Bancorp on 11 of the 13 factors compared between the two stocks.

About Chemical Financial Corporation

Chemical Financial Corporation is a financial holding company. The Company operates in the commercial banking segment. The Company, through its subsidiary bank, Chemical Bank, offers banking and fiduciary products and services. These products and services include business and personal checking accounts, savings and individual retirement accounts, time deposit instruments, electronically accessed banking products, residential and commercial real estate financing, commercial lending, consumer financing, access to insurance and investment products, corporate and personal wealth management services, and other banking services. As of December 31, 2016, the Corporation and Chemical Bank served these markets through 249 banking offices. In addition to the banking offices, Chemical Bank operated eight loan production offices and over 272 automated teller machines, both on- and off-bank premises, as of December 31, 2016. Its loan portfolio includes commercial and real estate construction.

About Suffolk Bancorp

Suffolk Bancorp is the bank holding company for Suffolk County National Bank of Riverhead (the Bank). The Bank is a community bank, which offers commercial and retail banking services to its customers. The Bank makes commercial real estate floating and fixed rate loans, multifamily and mixed use commercial loans primarily in the boroughs of New York City, commercial and industrial loans to manufacturers, wholesalers, distributors, developers/contractors and retailers and agricultural loans. The Bank finances its activities through a combination of deposits, including demand, saving, negotiable order of withdrawal and money market deposits, as well as time deposits, and short-term borrowings, which could include federal funds with correspondent banks, securities sold under agreements to repurchase and Federal Home Loan Bank (FHLB) borrowings.

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