Critical Survey: Northeast Community Bancorp (NASDAQ:NECB) & LCNB (NASDAQ:LCNB)

LCNB (NASDAQ:LCNB) and Northeast Community Bancorp (NASDAQ:NECB) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Earnings and Valuation

This table compares LCNB and Northeast Community Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LCNB	$125.42 million	1.97	$13.49 million	$1.67	10.45
Northeast Community Bancorp	$162.80 million	2.04	$47.07 million	$3.27	7.25

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

Dividends

LCNB pays an annual dividend of $0.88 per share and has a dividend yield of 5.0%. Northeast Community Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 3.4%. LCNB pays out 52.7% of its earnings in the form of a dividend. Northeast Community Bancorp pays out 24.5% 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. LCNB has increased its dividend for 7 consecutive years and Northeast Community Bancorp has increased its dividend for 2 consecutive years. LCNB is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for LCNB and Northeast Community Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LCNB	0	2	0	0	2.00
Northeast Community Bancorp	0	2	0	0	2.00

LCNB presently has a consensus price target of $16.25, suggesting a potential downside of 6.88%. Given LCNB’s higher possible upside, equities research analysts clearly believe LCNB is more favorable than Northeast Community Bancorp.

Volatility & Risk

LCNB has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500. Comparatively, Northeast Community Bancorp has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500.

Institutional and Insider Ownership

34.7% of LCNB shares are owned by institutional investors. Comparatively, 53.3% of Northeast Community Bancorp shares are owned by institutional investors. 6.0% of LCNB shares are owned by insiders. Comparatively, 6.3% of Northeast Community Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares LCNB and Northeast Community Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LCNB	18.63%	9.05%	1.03%
Northeast Community Bancorp	27.97%	13.43%	2.23%

Summary

Northeast Community Bancorp beats LCNB on 10 of the 15 factors compared between the two stocks.

About LCNB

LCNB Corp. operates as the financial holding company for LCNB National Bank that provides banking services in Ohio. Its deposit products include checking accounts, demand deposits, savings accounts, NOW and money market deposits, as well as individual retirement accounts and time certificates. The company's loan products comprise commercial and industrial, commercial and residential real estate, agricultural, construction, and small business administration loans; and residential mortgage loans that consists of loans for purchasing or refinancing personal residences, home equity lines of credit, and loans for commercial or consumer purposes secured by residential mortgages. It offers consumer loans, such as automobile, recreational vehicles, boat, home improvement, and personal loans. In addition, the company provides trust administration, estate settlement, and fiduciary services; and investment management services for trusts, agency accounts, individual retirement accounts, and foundations/endowments. Further, it offers investment services and products, including financial needs analysis, mutual funds, securities trading, annuities, and life insurance; and security brokerage services. Additionally, the company provides safe deposit boxes, night depositories, cashier's checks, bank-by-mail, ATMs, cash and transaction services, debit cards, wire transfers, electronic funds transfer, utility bill collections, notary public service, cash management services, telephone banking, PC Internet banking, mobile banking, and other services for individuals and businesses. LCNB Corp. was founded in 1877 and is headquartered in Lebanon, Ohio.

About Northeast Community Bancorp

Northeast Community Bancorp, Inc. operates as the holding company for NorthEast Community Bank that provides financial services for individuals and businesses. It accepts various deposit instruments, including checking accounts, money market accounts, regular savings accounts, and non-interest bearing demand accounts, as well as certificates of deposits. The company also offers construction, commercial and industrial, multifamily and mixed-use real estate, non-residential real estate loans, and consumer loans. In addition, it invests in various types of liquid assets, including U.S. Treasury obligations, municipal securities, deposits at the Federal Home Loan Bank of New York, and certificates of deposit of federally insured institutions, as well as securities of various federal agencies, and of state and municipal governments. Further, the company offers financial planning and investment advisory services; and life insurance products and fixed-rate annuities. It operates full-service branches located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts; and loan production offices located in White Plains, New York, and New City counties in New York and Danvers, Massachusetts. Northeast Community Bancorp, Inc. was founded in 1934 and is headquartered in White Plains, New York.