Reviewing Chemung Financial (NASDAQ:CHMG) & Northeast Bank (NASDAQ:NBN)

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

Risk & Volatility

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

Institutional & Insider Ownership

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

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Northeast Bank and Chemung Financial, as reported by MarketBeat.com.

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

Northeast Bank currently has a consensus target price of $54.00, indicating a potential downside of 1.87%. Chemung Financial has a consensus target price of $49.00, indicating a potential upside of 12.90%. Given Chemung Financial’s higher probable upside, analysts clearly believe Chemung Financial is more favorable than Northeast Bank.

Dividends

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Bank	$182.43 million	N/A	$44.19 million	$7.30	7.54
Chemung Financial	$137.62 million	1.50	$25.00 million	$5.22	8.31

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.

Profitability

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

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

Summary

Northeast Bank beats Chemung Financial on 9 of the 15 factors compared between the two stocks.

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.

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.