Analyzing Auburn National Bancorporation (NASDAQ:AUBN) and Eagle Bancorp (NASDAQ:EGBN)

Auburn National Bancorporation (NASDAQ:AUBN) and Eagle Bancorp (NASDAQ:EGBN) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, dividends, analyst recommendations, institutional ownership, valuation, risk and earnings.

Dividends

Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 5.4%. Eagle Bancorp pays an annual dividend of $0.66 per share and has a dividend yield of 2.9%. Auburn National Bancorporation pays out 469.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eagle Bancorp pays out 26.3% of its earnings in the form of a dividend. Auburn National Bancorporation has increased its dividend for 22 consecutive years. Auburn National Bancorporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

39.5% of Auburn National Bancorporation shares are owned by institutional investors. Comparatively, 78.0% of Eagle Bancorp shares are owned by institutional investors. 24.4% of Auburn National Bancorporation shares are owned by insiders. Comparatively, 3.1% of Eagle Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for Auburn National Bancorporation and Eagle Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Auburn National Bancorporation	0	0	0	0	N/A
Eagle Bancorp	0	2	0	0	2.00

Eagle Bancorp has a consensus target price of $24.50, suggesting a potential upside of 5.83%. Given Eagle Bancorp’s higher possible upside, analysts plainly believe Eagle Bancorp is more favorable than Auburn National Bancorporation.

Profitability

This table compares Auburn National Bancorporation and Eagle Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Auburn National Bancorporation	1.80%	0.85%	0.06%
Eagle Bancorp	-5.28%	5.50%	0.59%

Risk & Volatility

Auburn National Bancorporation has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500. Comparatively, Eagle Bancorp has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.

Earnings and Valuation

This table compares Auburn National Bancorporation and Eagle Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Auburn National Bancorporation	$22.92 million	3.06	$1.39 million	$0.23	87.22
Eagle Bancorp	$307.92 million	2.27	$100.53 million	$2.51	9.22

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

Summary

Eagle Bancorp beats Auburn National Bancorporation on 9 of the 15 factors compared between the two stocks.

About Auburn National Bancorporation

Auburn National Bancorporation, Inc. operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company offers checking, savings, and transaction deposit accounts, as well as certificates of deposit. It also provides commercial, financial, agricultural, real estate construction, and consumer loan products; and other financial services. In addition, the company offers automated teller services; debit cards; online banking, bill payment, and other electronic banking services; and safe deposit boxes. Auburn National Bancorporation, Inc. was founded in 1907 and is headquartered in Auburn, Alabama.

About Eagle Bancorp

Eagle Bancorp, Inc. operates as the bank holding company for EagleBank that provides commercial and consumer banking services primarily in the United States. The company also offers various commercial and consumer lending products comprising commercial loans for working capital, equipment purchases, real estate lines of credit, and government contract financing; asset based lending and accounts receivable financing; construction and commercial real estate loans; business equipment financing; consumer home equity lines of credit, personal lines of credit, and term loans; consumer installment loans, such as auto and personal loans; personal credit cards; and residential mortgage loans. In addition, it provides online and mobile banking services; checking and saving accounts; and other deposit services, including cash management services, business sweep accounts, lock boxes, remote deposit captures, account reconciliation services, merchant card services, safety deposit boxes, and automated clearing house origination, as well as after-hours depositories and ATM services. Further, the company offers insurance products and services through a referral program; and treasury management services. The company serves sole proprietors, small and medium-sized businesses, partnerships, corporations, and non-profit organizations and associations, as well as investors. Eagle Bancorp, Inc. was incorporated in 1997 and is headquartered in Bethesda, Maryland.