Financial Survey: Commercial National Financial (OTCMKTS:CEFC) and Hanover Bancorp (NASDAQ:HNVR)

Commercial National Financial (OTCMKTS:CEFC) and Hanover Bancorp (NASDAQ:HNVR) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Insider and Institutional Ownership

15.0% of Hanover Bancorp shares are owned by institutional investors. 23.0% of Commercial National Financial shares are owned by insiders. Comparatively, 24.8% of Hanover Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Commercial National Financial pays an annual dividend of $0.56 per share and has a dividend yield of 5.9%. Hanover Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. Commercial National Financial pays out 37.8% of its earnings in the form of a dividend. Hanover Bancorp pays out 24.2% 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Commercial National Financial	20.10%	N/A	N/A
Hanover Bancorp	8.70%	6.33%	0.52%

Earnings and Valuation

This table compares Commercial National Financial and Hanover Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commercial National Financial	$27.39 million	1.38	$6.17 million	$1.48	6.42
Hanover Bancorp	$113.89 million	1.18	$15.16 million	$1.65	11.45

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

Volatility & Risk

Commercial National Financial has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Hanover Bancorp has a beta of -0.23, meaning that its share price is 123% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Commercial National Financial and Hanover Bancorp, as provided by MarketBeat.com.

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

Hanover Bancorp has a consensus target price of $22.00, indicating a potential upside of 16.46%. Given Hanover Bancorp’s higher probable upside, analysts plainly believe Hanover Bancorp is more favorable than Commercial National Financial.

Summary

Hanover Bancorp beats Commercial National Financial on 11 of the 15 factors compared between the two stocks.

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.

About Hanover Bancorp

Hanover Bancorp, Inc., a bank holding company for Hanover Community Bank, provides personal and business lending and deposit services to businesses, municipalities, and individuals in the New York metro area. The company offers checking, credit cards, debit cards, money market, savings, government and municipal banking, and professional services, as well as time deposits, including certificate of deposit and individual retirement accounts. It also provides business loans, commercial real estate financing, small business administration, lending directory services, and residential mortgage. In addition, the company offers cash management, online and mobile banking, merchant services, and digital solutions. Its banking offices are located in Nassau, Suffolk, Queens, Kings, New York Counties, New York, Monmouth County, Freehold, and New Jersey. The company was founded in 2008 and is headquartered in Mineola, New York.