National Bank (NYSE:NBHC) and Chemung Financial (NASDAQ:CHMG) Head-To-Head Review

Chemung Financial (NASDAQ:CHMG) and National Bank (NYSE:NBHC) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chemung Financial	12.77%	12.45%	1.13%
National Bank	17.14%	8.72%	1.18%

Risk and Volatility

Chemung Financial has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, National Bank has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Valuation & Earnings

This table compares Chemung Financial and National Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chemung Financial	$140.78 million	2.55	$15.10 million	$3.79	19.66
National Bank	$587.34 million	3.39	$109.57 million	$2.68	16.58

National Bank has higher revenue and earnings than Chemung Financial. National 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.

Insider and Institutional Ownership

47.5% of Chemung Financial shares are owned by institutional investors. Comparatively, 92.7% of National Bank shares are owned by institutional investors. 12.7% of Chemung Financial shares are owned by insiders. Comparatively, 6.8% of National Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Chemung Financial and National Bank, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chemung Financial	0	2	1	0	2.33
National Bank	0	2	5	0	2.71

Chemung Financial currently has a consensus target price of $64.00, indicating a potential downside of 14.09%. National Bank has a consensus target price of $46.20, indicating a potential upside of 3.99%. Given National Bank’s stronger consensus rating and higher possible upside, analysts clearly believe National Bank is more favorable than Chemung Financial.

Dividends

Chemung Financial pays an annual dividend of $1.36 per share and has a dividend yield of 1.8%. National Bank pays an annual dividend of $1.28 per share and has a dividend yield of 2.9%. Chemung Financial pays out 35.9% of its earnings in the form of a dividend. National Bank pays out 47.8% 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. Chemung Financial has raised its dividend for 1 consecutive years and National Bank has raised its dividend for 10 consecutive years. National Bank is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

National Bank beats Chemung Financial on 12 of the 17 factors compared between the two stocks.

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.

About National Bank

National Bank Holdings Corporation operates as the bank holding company for NBH Bank that provides various banking products and financial services to commercial, business, and consumer clients in the United States. It offers deposit products, including checking, savings, money market, and other deposit accounts, including fixed-rate and fixed maturity time deposits. The company also provides commercial and industrial loans and leases, such as working capital loans, equipment loans, lender finance loans, food and agriculture loans, government and non-profit loans, owner occupied commercial real estate loans, and other commercial loans and leases; non-owner occupied commercial real estate loans consisting of loans on commercial properties, such as office buildings, warehouse/distribution buildings, multi-family, hospitality, and retail buildings; small business administration loans to support small businesses and entrepreneurs; term loans, line of credits, and real estate secured loans; residential real estate loans; and consumer loans. In addition, it offers treasury management solutions comprising online and mobile banking, commercial credit card, wire transfer, automated clearing house, electronic bill payment, lock box, remote deposit capture, merchant processing, cash vault, controlled disbursements, and fraud prevention services, as well as other auxiliary services, including account reconciliation, collections, repurchase accounts, zero balance accounts, and sweep accounts. The company operates through a network of banking centers located in Colorado, the greater Kansas City region, New Mexico, Utah, Wyoming, Idaho, and Texas. It also operates ATMs. The company was formerly known as NBH Holdings Corp. and changed its name to National Bank Holdings Corporation in March 2012. The company was incorporated in 2009 and is headquartered in Greenwood Village, Colorado.