ConnectOne Bancorp (NASDAQ: CNOB) and Lakeland Financial Corporation (NASDAQ:LKFN) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings for ConnectOne Bancorp and Lakeland Financial Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ConnectOne Bancorp 0 0 4 0 3.00
Lakeland Financial Corporation 0 1 1 0 2.50

ConnectOne Bancorp currently has a consensus target price of $29.25, indicating a potential upside of 15.61%. Lakeland Financial Corporation has a consensus target price of $46.00, indicating a potential downside of 5.37%. Given ConnectOne Bancorp’s stronger consensus rating and higher possible upside, equities research analysts clearly believe ConnectOne Bancorp is more favorable than Lakeland Financial Corporation.

Risk and Volatility

ConnectOne Bancorp has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, Lakeland Financial Corporation has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Earnings & Valuation

This table compares ConnectOne Bancorp and Lakeland Financial Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ConnectOne Bancorp $111.75 million 7.23 $29.68 million $0.93 27.20
Lakeland Financial Corporation $159.23 million 7.64 $55.80 million $2.23 21.80

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

Dividends

ConnectOne Bancorp pays an annual dividend of $0.30 per share and has a dividend yield of 1.2%. Lakeland Financial Corporation pays an annual dividend of $0.88 per share and has a dividend yield of 1.8%. ConnectOne Bancorp pays out 32.3% of its earnings in the form of a dividend. Lakeland Financial Corporation pays out 39.5% 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.

Profitability

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

Net Margins Return on Equity Return on Assets
ConnectOne Bancorp 16.42% 9.37% 1.11%
Lakeland Financial Corporation 30.72% 13.06% 1.32%

Institutional and Insider Ownership

68.4% of ConnectOne Bancorp shares are held by institutional investors. Comparatively, 69.3% of Lakeland Financial Corporation shares are held by institutional investors. 7.6% of ConnectOne Bancorp shares are held by insiders. Comparatively, 5.0% of Lakeland Financial Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Lakeland Financial Corporation beats ConnectOne Bancorp on 10 of the 16 factors compared between the two stocks.

About ConnectOne Bancorp

ConnectOne Bancorp, Inc. is a bank holding company of ConnectOne Bank (the Bank). The Bank is a community-based, full-service New Jersey-chartered commercial bank. The Bank offers a range of deposit and loan products. In addition, to attract the business of consumer and business customers, it also provides an array of other banking services. Products and services provided include personal and business checking accounts, retirement accounts, money market accounts, time and savings accounts, credit cards, wire transfers, access to automated teller services, Internet banking, Treasury Direct, automated clearing house (ACH) origination, lockbox services and mobile banking by phone. In addition, it offers safe deposit boxes. The Bank also offers remote deposit capture banking for both retail and business customers. It offers a range of deposit and loan products and services to the general public and, in particular, to small and mid-sized businesses, local professionals and individuals.

About Lakeland Financial Corporation

Lakeland Financial Corporation is a bank holding company. The Company, through its subsidiary, Lake City Bank (the Bank), provides an array of products and services throughout its Northern and Central Indiana markets. It offers commercial and consumer banking services, as well as trust and wealth management, brokerage, investment and treasury management commercial services. It serves a range of industries, including commercial real estate, manufacturing, agriculture, construction, retail, wholesale, finance and insurance, accommodation and food services, and healthcare. The Bank’s activities cover all phases of commercial banking, including deposit products, commercial and consumer lending, retail and merchant credit card services, corporate treasury management services, and wealth advisory, trust and brokerage services. It provides financial services through the Bank, with approximately 50 branch offices in 15 counties in Northern and Central Indiana.

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