Critical Survey: Community Financial System (NYSE:CBU) versus Pearl Diver Credit (NYSE:PDCC)

Community Financial System (NYSE:CBU) and Pearl Diver Credit (NYSE:PDCC) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Institutional and Insider Ownership

73.8% of Community Financial System shares are owned by institutional investors. 1.2% of Community Financial System shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Community Financial System and Pearl Diver Credit”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Financial System	$1.01 billion	3.30	$210.46 million	$4.12	15.42
Pearl Diver Credit	N/A	N/A	N/A	N/A	N/A

Community Financial System has higher revenue and earnings than Pearl Diver Credit.

Profitability

This table compares Community Financial System and Pearl Diver Credit’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community Financial System	21.26%	11.24%	1.28%
Pearl Diver Credit	N/A	N/A	N/A

Risk and Volatility

Community Financial System has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, Pearl Diver Credit has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Dividends

Community Financial System pays an annual dividend of $1.88 per share and has a dividend yield of 3.0%. Pearl Diver Credit pays an annual dividend of $1.56 per share and has a dividend yield of 15.3%. Community Financial System pays out 45.6% of its earnings in the form of a dividend. Community Financial System has increased its dividend for 33 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Community Financial System and Pearl Diver Credit, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Financial System	0	4	1	1	2.50
Pearl Diver Credit	0	0	0	1	4.00

Community Financial System presently has a consensus target price of $69.75, indicating a potential upside of 9.76%. Pearl Diver Credit has a consensus target price of $19.50, indicating a potential upside of 91.65%. Given Pearl Diver Credit’s stronger consensus rating and higher possible upside, analysts clearly believe Pearl Diver Credit is more favorable than Community Financial System.

Summary

Community Financial System beats Pearl Diver Credit on 9 of the 13 factors compared between the two stocks.

About Community Financial System

Community Bank System, Inc. operates as the bank holding company for Community Bank, N.A. that provides various banking and other financial services to retail, commercial, institutional, and municipal customers. It operates through three segments: Banking, Employee Benefit Services, and All Other. The company offers various deposits products, such as interest and noninterest -bearing checking, savings, and money market deposit accounts, as well as time deposits. It also provides loans, including consumer mortgages; general purpose commercial and industrial loans, and mortgages on commercial properties; paycheck protection program loans; installment loans that are originated through selected dealerships and are secured by automobiles, marine, and other recreational vehicles; personal installment loans and check credit lines of credit for consumers; and home equity products. In addition, the company offers broker-dealer and investment advisory; cash management, investment, and treasury services; asset management services; and employee benefit services, as well as operates as a full-service insurance agency that provides personal and commercial lines of insurance, and other risk management products and services. Further, it offers contribution plan administration, employee benefit trust, collective investment fund, retirement plan administration and benefit consulting, fund administration, transfer agency, actuarial and benefit consulting, and health and welfare consulting services; and act as an investor in residential and commercial real estate activities. Additionally, the company offers wealth management, retirement planning, higher educational planning, fiduciary, risk management, trust, and personal financial planning services; and investment alternatives, including stocks, bonds, mutual funds, and insurance and advisory products, as well as master recordkeeping services. Community Bank System, Inc. was founded in 1866 and is headquartered in DeWitt, New York.

About Pearl Diver Credit

Pearl Diver Credit Company Inc. is a newly organized, externally managed, non-diversified, closed-end management investment company. Its primary investment objective is to maximize its portfolio’s total return, with a secondary objective of generating high current income. Pearl Diver Credit Company Inc. is based in NEW YORK.