Reviewing CF Bankshares (NASDAQ:CFBK) & Horizon Bancorp (IN) (NASDAQ:HBNC)

CF Bankshares (NASDAQ:CFBK) and Horizon Bancorp (IN) (NASDAQ:HBNC) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, profitability, valuation, dividends, institutional ownership and earnings.

Volatility & Risk

CF Bankshares has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500. Comparatively, Horizon Bancorp (IN) has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for CF Bankshares and Horizon Bancorp (IN), as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CF Bankshares	0	2	1	0	2.33
Horizon Bancorp (IN)	2	1	2	0	2.00

CF Bankshares currently has a consensus target price of $29.00, suggesting a potential downside of 12.94%. Horizon Bancorp (IN) has a consensus target price of $20.33, suggesting a potential upside of 9.44%. Given Horizon Bancorp (IN)’s higher possible upside, analysts clearly believe Horizon Bancorp (IN) is more favorable than CF Bankshares.

Profitability

This table compares CF Bankshares and Horizon Bancorp (IN)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CF Bankshares	13.82%	9.87%	0.82%
Horizon Bancorp (IN)	-37.12%	11.56%	1.17%

Dividends

CF Bankshares pays an annual dividend of $0.36 per share and has a dividend yield of 1.1%. Horizon Bancorp (IN) pays an annual dividend of $0.64 per share and has a dividend yield of 3.4%. CF Bankshares pays out 13.4% of its earnings in the form of a dividend. Horizon Bancorp (IN) pays out -20.3% 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. CF Bankshares has increased its dividend for 4 consecutive years. Horizon Bancorp (IN) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

41.1% of CF Bankshares shares are held by institutional investors. Comparatively, 64.5% of Horizon Bancorp (IN) shares are held by institutional investors. 21.0% of CF Bankshares shares are held by insiders. Comparatively, 2.5% of Horizon Bancorp (IN) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares CF Bankshares and Horizon Bancorp (IN)”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CF Bankshares	$125.92 million	1.69	$17.54 million	$2.69	12.38
Horizon Bancorp (IN)	$405.46 million	2.35	-$150.48 million	($3.15)	-5.90

CF Bankshares has higher earnings, but lower revenue than Horizon Bancorp (IN). Horizon Bancorp (IN) is trading at a lower price-to-earnings ratio than CF Bankshares, indicating that it is currently the more affordable of the two stocks.

Summary

Horizon Bancorp (IN) beats CF Bankshares on 10 of the 17 factors compared between the two stocks.

About CF Bankshares

CF Bankshares Inc. operates as the bank holding company for CFBank, National Association that provides various banking products and services in the United States. The company accepts savings, retail and business checking accounts, and money market accounts, as well as certificates of deposit. It offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans and equipment leases; residential real estate loans and treasury management depository services; retail banking services and products. In addition, the company offers consumer loans, such as home equity lines of credit, home improvement loans, and loans secured by deposits and purchased loans, as well as other loans. Further, it provides online internet banking, mobile banking, and remote deposits. The company was formerly known as Central Federal Corporation and changed its name to CF Bankshares Inc. in July 2020. CF Bankshares Inc. was founded in 1892 and is based in Columbus, Ohio.

About Horizon Bancorp (IN)

Horizon Bancorp, Inc. operates as the bank holding company for Horizon Bank that engages in the provision of commercial and retail banking services. The company offers checking, saving, money market, certificate of deposits, individual retirement accounts, and time deposits, as well as non-interest- and interest-bearing demand deposits. It also provides commercial, residential real estate, mortgage, home equity, auto, personal, business, agricultural, and SBA loans, as well as credit cards. In addition, the company offers corporate and individual trust and agency, investment management, and real estate investment trust services; debit cards; treasury management; online and mobile banking; wealth, retirement, and estate and trust services; and sells various insurance products. It operates through full-service offices in northern and central Indiana and southern and central Michigan. Horizon Bancorp, Inc. was founded in 1873 and is headquartered in Michigan City, Indiana.