Critical Analysis: CF Bankshares (NASDAQ:CFBK) and ECB Bancorp (NASDAQ:ECBK)

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

Valuation & Earnings

This table compares ECB Bancorp and CF Bankshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ECB Bancorp	$79.51 million	2.23	$7.77 million	$1.15	17.59
CF Bankshares	$125.92 million	1.67	$17.54 million	$2.78	11.75

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

Profitability

This table compares ECB Bancorp and CF Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ECB Bancorp	11.49%	5.60%	0.61%
CF Bankshares	14.37%	9.86%	0.85%

Insider & Institutional Ownership

30.3% of ECB Bancorp shares are held by institutional investors. Comparatively, 41.1% of CF Bankshares shares are held by institutional investors. 10.4% of ECB Bancorp shares are held by company insiders. Comparatively, 17.7% of CF Bankshares shares are held by company 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 Ratings

This is a summary of current ratings and price targets for ECB Bancorp and CF Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ECB Bancorp	0	0	1	0	3.00
CF Bankshares	0	1	2	0	2.67

CF Bankshares has a consensus target price of $36.00, suggesting a potential upside of 10.19%. Given CF Bankshares’ higher possible upside, analysts clearly believe CF Bankshares is more favorable than ECB Bancorp.

Risk and Volatility

ECB Bancorp has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, CF Bankshares has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Summary

CF Bankshares beats ECB Bancorp on 10 of the 14 factors compared between the two stocks.

About ECB Bancorp

ECB Bancorp, Inc. operating as a holding company for Everett Co-operative Bank that provides various banking products and services. The company accepts various deposit products, including certificate of deposit accounts, IRAs, money market accounts, savings accounts, demand deposit accounts, and interest-bearing and noninterest-bearing checking accounts. It also offers one- to four-family residential real estate, commercial real estate and multifamily real estate, construction and land, commercial, and consumer loans, as well as home equity loans and lines of credit. In addition, the company invests in securities, consisting primarily of U.S. government and federal agency obligations, mortgage-backed securities, and corporate bonds. ECB Bancorp, Inc. was founded in 1890 and is based in Everett, Massachusetts.

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.