Ames National (NASDAQ:ATLO) and LCNB (NASDAQ:LCNB) Critical Review

LCNB (NASDAQ:LCNB) and Ames National (NASDAQ:ATLO) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, profitability, institutional ownership and analyst recommendations.

Profitability

This table compares LCNB and Ames National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LCNB	5.97%	6.55%	0.67%
Ames National	10.77%	5.92%	0.44%

Institutional & Insider Ownership

34.7% of LCNB shares are held by institutional investors. Comparatively, 26.5% of Ames National shares are held by institutional investors. 5.8% of LCNB shares are held by insiders. Comparatively, 3.2% of Ames National shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

LCNB has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.

Dividends

LCNB pays an annual dividend of $0.88 per share and has a dividend yield of 6.0%. Ames National pays an annual dividend of $0.80 per share and has a dividend yield of 4.5%. LCNB pays out 95.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ames National pays out 72.1% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares LCNB and Ames National”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LCNB	$72.42 million	2.87	$12.63 million	$0.92	15.96
Ames National	$52.87 million	3.01	$10.82 million	$1.11	15.93

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for LCNB and Ames National, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LCNB	0	0	0	0	N/A
Ames National	0	0	0	0	N/A

Summary

LCNB beats Ames National on 9 of the 13 factors compared between the two stocks.

About LCNB

LCNB Corp. operates as the financial holding company for LCNB National Bank that provides banking services in Ohio. Its deposit products include checking accounts, demand deposits, savings accounts, NOW and money market deposits, as well as individual retirement accounts and time certificates. The company's loan products comprise commercial and industrial, commercial and residential real estate, agricultural, construction, and small business administration loans; and residential mortgage loans that consists of loans for purchasing or refinancing personal residences, home equity lines of credit, and loans for commercial or consumer purposes secured by residential mortgages. It offers consumer loans, such as automobile, recreational vehicles, boat, home improvement, and personal loans. In addition, the company provides trust administration, estate settlement, and fiduciary services; and investment management services for trusts, agency accounts, individual retirement accounts, and foundations/endowments. Further, it offers investment services and products, including financial needs analysis, mutual funds, securities trading, annuities, and life insurance; and security brokerage services. Additionally, the company provides safe deposit boxes, night depositories, cashier's checks, bank-by-mail, ATMs, cash and transaction services, debit cards, wire transfers, electronic funds transfer, utility bill collections, notary public service, cash management services, telephone banking, PC Internet banking, mobile banking, and other services for individuals and businesses. LCNB Corp. was founded in 1877 and is headquartered in Lebanon, Ohio.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.