Reviewing Citizens Financial Services (NASDAQ:CZFS) and Commercial National Financial (OTCMKTS:CEFC)

Citizens Financial Services (NASDAQ:CZFS) and Commercial National Financial (OTCMKTS:CEFC) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.

Analyst Recommendations

This is a summary of recent ratings and price targets for Citizens Financial Services and Commercial National Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens Financial Services	0	0	1	0	3.00
Commercial National Financial	0	0	0	0	N/A

Citizens Financial Services currently has a consensus price target of $53.00, indicating a potential upside of 29.08%. Given Citizens Financial Services’ higher possible upside, research analysts clearly believe Citizens Financial Services is more favorable than Commercial National Financial.

Risk & Volatility

Citizens Financial Services has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500. Comparatively, Commercial National Financial has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Earnings and Valuation

This table compares Citizens Financial Services and Commercial National Financial’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens Financial Services	$138.72 million	1.39	$17.81 million	$3.69	11.13
Commercial National Financial	$27.39 million	N/A	$6.17 million	$1.48	5.95

Citizens Financial Services has higher revenue and earnings than Commercial National Financial. Commercial National Financial is trading at a lower price-to-earnings ratio than Citizens Financial Services, indicating that it is currently the more affordable of the two stocks.

Dividends

Citizens Financial Services pays an annual dividend of $1.96 per share and has a dividend yield of 4.8%. Commercial National Financial pays an annual dividend of $0.56 per share and has a dividend yield of 6.4%. Citizens Financial Services pays out 53.1% of its earnings in the form of a dividend. Commercial National Financial pays out 37.8% 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. Commercial National Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Citizens Financial Services and Commercial National Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citizens Financial Services	11.63%	10.43%	0.97%
Commercial National Financial	20.95%	N/A	N/A

Institutional & Insider Ownership

22.5% of Citizens Financial Services shares are held by institutional investors. 5.9% of Citizens Financial Services shares are held by company insiders. Comparatively, 23.0% of Commercial National Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Citizens Financial Services beats Commercial National Financial on 9 of the 14 factors compared between the two stocks.

About Citizens Financial Services

Citizens Financial Services, Inc., a bank holding company, provides various banking products and services for individual, business, governmental, and institutional customers. The company accepts various deposit products, such as checking, savings, and time deposit accounts. Its loan products include residential, commercial, and agricultural real estate loans; commercial and industrial loans; state and political subdivision loans; and consumer loans, as well as various other specialized financial services. The company also provides professional trust administration, investment management services, estate planning and administration, custody of securities, and individual retirement accounts. In addition, it offers brokerage and financial planning services, as well as assistance in various oil and gas leasing matters; and provides mutual funds, annuities, and health and life insurance products. Citizens Financial Services, Inc. was incorporated in 1984 and is headquartered in Mansfield, Pennsylvania.

About Commercial National Financial

Commercial National Financial Corporation operates as the holding company for Commercial Bank that provides various banking products and services to individuals, agricultural businesses, commercial businesses, and light industries in Michigan. The company accepts various deposit products, including checking and savings accounts, individual retirement accounts, certificates of deposit, and health savings accounts. It also offers personal loan products, such as automobile loans, recreational vehicle loans, personal lines of credit, and unsecured term loans, as well as home equity loans and mortgage loans; and business loans, including secured lines of credit, business equity line of credit, SBA loans, equipment loans, real estate loans, vehicle loans, term loans, USDA loan programs, and capital access loan programs. In addition, the company provides other services comprising business VISA check cards, debit and ATM cards, business statement savings, business certificates of deposit, merchant services, night depository, telephone banking, online banking, e-statements, direct deposit of payroll for employees, child support payments, collection of receivables, and remote deposit capture, as well as treasury services. It provides its services through offices located in Barry, Gratiot, Ingham, Kent, and Montcalm counties in Michigan. The company was founded in 1893 and is headquartered in Ithaca, Michigan.