Financial Review: MainStreet Bancshares (NASDAQ:MNSB) & Citizens & Northern (NASDAQ:CZNC)

Citizens & Northern (NASDAQ:CZNC) and MainStreet Bancshares (NASDAQ:MNSB) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, valuation, risk, earnings and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Citizens & Northern and MainStreet Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens & Northern	0	1	0	0	2.00
MainStreet Bancshares	0	0	0	0	0.00

Volatility & Risk

Citizens & Northern has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, MainStreet Bancshares has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Dividends

Citizens & Northern pays an annual dividend of $1.12 per share and has a dividend yield of 5.2%. MainStreet Bancshares pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. Citizens & Northern pays out 66.3% of its earnings in the form of a dividend. MainStreet Bancshares pays out -24.8% 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.

Profitability

This table compares Citizens & Northern and MainStreet Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citizens & Northern	14.47%	8.28%	0.86%
MainStreet Bancshares	8.34%	5.77%	0.54%

Insider & Institutional Ownership

30.8% of Citizens & Northern shares are owned by institutional investors. Comparatively, 52.3% of MainStreet Bancshares shares are owned by institutional investors. 3.7% of Citizens & Northern shares are owned by insiders. Comparatively, 9.2% of MainStreet Bancshares shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Citizens & Northern and MainStreet Bancshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens & Northern	$106.51 million	3.10	$24.15 million	$1.69	12.67
MainStreet Bancshares	$65.83 million	1.96	$26.58 million	($1.61)	-10.53

MainStreet Bancshares has lower revenue, but higher earnings than Citizens & Northern. MainStreet Bancshares is trading at a lower price-to-earnings ratio than Citizens & Northern, indicating that it is currently the more affordable of the two stocks.

Summary

Citizens & Northern beats MainStreet Bancshares on 9 of the 14 factors compared between the two stocks.

About Citizens & Northern

Citizens & Northern Corp. is a holding company, which engages in community banking. It provides a full range of banking and mortgage services to individual and corporate customers in North Central Pennsylvania and Southern New York State. The firm’s lending products include mortgage loans, commercial loans, and consumer loans. Its deposit products include various types of checking accounts, passbook and statement savings, money market accounts, interest checking accounts, individual retirement accounts, and certificates of deposit. The company was founded in 1864 and is headquartered in Wellsboro, PA.

About MainStreet Bancshares

MainStreet Bancshares, Inc. operates as the bank holding company for MainStreet Bank that provides various banking products and services for individuals, small to medium-sized businesses, and professional service organizations. The company offers demand, NOW, money market, savings, and sweep accounts, as well as certificates of deposit; business and consumer checking, interest-bearing checking, business account analysis, and other depository services; and cash management, wire transfer, check imaging, bill pay, remote deposit capture, and courier services. It also provides commercial loans, include government contract receivables, plant and equipment, general working capital, contract administration, and acquisition loans; commercial real estate, real estate construction, and residential real estate loans; and consumer loans comprising term loans and overdraft protection, as well as debit and credit cards. In addition, the company offers deposit insurance solutions; remote deposit of checks; and internet bill payment, online cash management, and online and mobile banking services. It operates in Herndon, Fairfax, McLean, Leesburg, Clarendon, and Washington D.C., as well as automated teller machines. The company was incorporated in 2003 and is headquartered in Fairfax, Virginia.