Associated Banc (NYSE:ASB) and Penns Woods Bancorp (NASDAQ:PWOD) Critical Review

Penns Woods Bancorp (NASDAQ:PWOD) and Associated Banc (NYSE:ASB) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.

Institutional & Insider Ownership

27.9% of Penns Woods Bancorp shares are held by institutional investors. Comparatively, 83.0% of Associated Banc shares are held by institutional investors. 4.0% of Penns Woods Bancorp shares are held by company insiders. Comparatively, 1.5% of Associated Banc 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.

Valuation & Earnings

This table compares Penns Woods Bancorp and Associated Banc”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Penns Woods Bancorp	$68.50 million	3.33	$17.74 million	$2.36	12.68
Associated Banc	$1.03 billion	3.91	$123.14 million	$0.79	30.68

Associated Banc has higher revenue and earnings than Penns Woods Bancorp. Penns Woods Bancorp is trading at a lower price-to-earnings ratio than Associated Banc, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Penns Woods Bancorp and Associated Banc, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Penns Woods Bancorp	0	0	0	0	0.00
Associated Banc	0	9	0	0	2.00

Associated Banc has a consensus target price of $27.00, suggesting a potential upside of 11.39%. Given Associated Banc’s stronger consensus rating and higher probable upside, analysts clearly believe Associated Banc is more favorable than Penns Woods Bancorp.

Volatility & Risk

Penns Woods Bancorp has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, Associated Banc has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Profitability

This table compares Penns Woods Bancorp and Associated Banc’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Penns Woods Bancorp	14.87%	9.26%	0.82%
Associated Banc	5.15%	8.24%	0.82%

Dividends

Penns Woods Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 4.3%. Associated Banc pays an annual dividend of $0.92 per share and has a dividend yield of 3.8%. Penns Woods Bancorp pays out 54.2% of its earnings in the form of a dividend. Associated Banc pays out 116.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Associated Banc has raised its dividend for 13 consecutive years. Penns Woods Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Associated Banc beats Penns Woods Bancorp on 9 of the 15 factors compared between the two stocks.

About Penns Woods Bancorp

Penns Woods Bancorp, Inc. operates as the bank holding company for Jersey Shore State Bank, which provides commercial and retail banking services to individuals, partnerships, non-profit organizations, and corporations. It accepts time, demand, and savings deposits, including super NOW accounts, statement savings accounts, money market accounts, and certificates of deposit, as well as checking and individual retirement account (IRAs) accounts. The company also offers loan products comprising residential, commercial, and construction real estate loans; agricultural loans for the purchase or improvement of real estate; commercial loans for the acquisition and improvement of real estate, purchase of equipment, and working capital purposes; letters of credit; consumer loans, such as construction and residential mortgages, home equity loans and lines, automobile financing, personal loans and lines of credit, and overdraft and check lines; and revolving credit loans with overdraft protection. In addition, it provides securities brokerage and financial planning services, which include the sale of life insurance products, annuities, and estate planning services; property and casualty, and auto insurance products; safe deposit services; ATM services; and Internet and telephone banking services. Further, the company engages in real estate transactions and investment activities. It operates through a network of offices located in Clinton, Lycoming, Centre, Montour, Union, Blair, and Luzerne Counties, Pennsylvania. Penns Woods Bancorp, Inc. was founded in 1934 and is headquartered in Williamsport, Pennsylvania.

About Associated Banc

Associated Banc-Corp, a bank holding company, provides various banking and nonbanking products to individuals and businesses in Wisconsin, Illinois, and Minnesota. The company offers lending solutions, including commercial loans and lines of credit, commercial real estate financing, construction loans, letters of credit, leasing, asset based lending and equipment finance, loan syndications products, residential mortgages, home equity loans and lines of credit, personal and installment loans, auto finance and business loans, and business lines of credit. It also provides deposit and cash management solutions, such as commercial checking and interest-bearing deposit products, cash vault and night depository services, liquidity solutions, payables and receivables solutions, and information services; specialized financial services, such as interest rate risk management and foreign exchange solutions; fiduciary services, such as administration of pension, profit-sharing and other employee benefit plans, fiduciary and corporate agency services, and institutional asset management services; and investable funds solutions, including savings, money market deposit accounts, IRA accounts, CDs, fixed and variable annuities, full-service, discount, and online investment brokerage; investment advisory services; and trust and investment management accounts. In addition, the company offers deposit and transactional solutions, including checking, credit, debit and pre-paid cards, online banking and bill pay; and money transfer services. Associated Banc-Corp was founded in 1861 and is headquartered in Green Bay, Wisconsin.