Chemical Financial Corporation (NASDAQ: CHFC) and Lakeland Bancorp (NASDAQ:LBAI) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitability, risk and dividends.

Profitability

This table compares Chemical Financial Corporation and Lakeland 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%
Lakeland Bancorp 23.94% 9.21% 0.97%

Dividends

Chemical Financial Corporation pays an annual dividend of $1.12 per share and has a dividend yield of 2.1%. Lakeland Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 1.9%. Chemical Financial Corporation pays out 49.3% of its earnings in the form of a dividend. Lakeland Bancorp pays out 38.1% 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.

Risk and Volatility

Chemical Financial Corporation has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500. Comparatively, Lakeland Bancorp has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Chemical Financial Corporation and Lakeland Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chemical Financial Corporation 1 0 5 0 2.67
Lakeland Bancorp 0 3 0 0 2.00

Chemical Financial Corporation presently has a consensus price target of $53.42, suggesting a potential upside of 0.56%. Given Chemical Financial Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Chemical Financial Corporation is more favorable than Lakeland Bancorp.

Institutional and Insider Ownership

76.5% of Chemical Financial Corporation shares are held by institutional investors. Comparatively, 52.6% of Lakeland Bancorp shares are held by institutional investors. 2.2% of Chemical Financial Corporation shares are held by company insiders. Comparatively, 6.2% of Lakeland Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Chemical Financial Corporation and Lakeland Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Chemical Financial Corporation $630.88 million 5.99 $161.50 million $2.27 23.40
Lakeland Bancorp $177.18 million 5.51 $49.72 million $1.05 19.62

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

Summary

Chemical Financial Corporation beats Lakeland Bancorp on 11 of the 16 factors compared between the two stocks.

Chemical Financial Corporation Company Profile

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.

Lakeland Bancorp Company Profile

Lakeland Bancorp, Inc. is the bank holding company for Lakeland Bank (Lakeland). Lakeland operates under a state bank charter and provides full banking services. Lakeland generates commercial, mortgage and consumer loans and receives deposits from customers located in Northern and Central New Jersey. Lakeland also provides non-deposit products, such as securities brokerage services, including mutual funds and variable annuities. Through Lakeland, the Company offers a range of lending, depository and related financial services to individuals and small to medium sized businesses located in northern and central New Jersey. Lakeland’s equipment financing division provides a solution to small and medium sized companies preferring to lease equipment over other financial alternatives. Lakeland’s asset based loan department provides commercial borrowers with another lending alternative. It also offers wire transfer, Internet banking, mobile banking and night depository services.

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