Critical Review: Citizens & Northern (NASDAQ:CZNC) & BayCom (NASDAQ:BCML)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
BayCom	17.10%	7.45%	0.92%
Citizens & Northern	16.50%	9.71%	1.00%

Volatility & Risk

BayCom has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Citizens & Northern has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.

Institutional & Insider Ownership

66.2% of BayCom shares are held by institutional investors. Comparatively, 30.8% of Citizens & Northern shares are held by institutional investors. 7.2% of BayCom shares are held by company insiders. Comparatively, 3.7% of Citizens & Northern 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.

Analyst Recommendations

This is a summary of current ratings for BayCom and Citizens & Northern, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BayCom	0	1	0	0	2.00
Citizens & Northern	0	1	0	0	2.00

BayCom presently has a consensus target price of $31.00, suggesting a potential upside of 12.77%. Given BayCom’s higher possible upside, analysts clearly believe BayCom is more favorable than Citizens & Northern.

Dividends

BayCom pays an annual dividend of $0.60 per share and has a dividend yield of 2.2%. Citizens & Northern pays an annual dividend of $1.12 per share and has a dividend yield of 5.4%. BayCom pays out 28.6% of its earnings in the form of a dividend. Citizens & Northern pays out 66.3% 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.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BayCom	$138.09 million	2.21	$23.61 million	$2.10	13.09
Citizens & Northern	$106.51 million	3.02	$25.96 million	$1.69	12.34

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

Summary

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

About BayCom

BayCom Corp operates as the bank holding company for United Business Bank that provides various financial services to small and mid-sized businesses, service professionals, and individuals. The company provides demand, savings, money market, and time deposit accounts. It offers commercial and multifamily real estate loans, including owner-occupied and investor real estate loans; commercial and industrial loans, such as equipment loans and working capital lines of credit; small business administration loans; construction and land loans; agriculture-related loans; and consumer loans comprising installment loans, unsecured and secured personal lines of credit, and overdraft protection. In addition, the company provides online and mobile banking, automated teller machine, remote deposit capture, night depository, courier, direct deposit, treasury management, wire transfer, automated clearing house, debit cards, cashier's and travelers checks, letters of credit, lockbox, positive pay, reverse positive pay, and account reconciliation services, as well as zero balance accounts and sweep accounts, including loan sweep. It operates through a network of full-service banking branches in Northern and Southern California; Las Vegas, Nevada; Denver, Colorado; Custer, Delta, and Grand counties, Colorado; and Seattle, Washington and Central New Mexico. The company was formerly known as Bay Commercial Bank and changed its name to BayCom Corp in January 2017. BayCom Corp was incorporated in 2004 and is headquartered in Walnut Creek, California.

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.