Analyzing Community Financial (NASDAQ:TCFC) and Premier Financial (NASDAQ:PFC)

Community Financial (NASDAQ:TCFCGet Rating) and Premier Financial (NASDAQ:PFCGet Rating) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.

Risk & Volatility

Community Financial has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Premier Financial has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500.

Profitability

This table compares Community Financial and Premier Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Community Financial 33.51% 12.60% 1.14%
Premier Financial 35.53% 10.84% 1.48%

Insider & Institutional Ownership

37.8% of Community Financial shares are owned by institutional investors. Comparatively, 67.5% of Premier Financial shares are owned by institutional investors. 8.0% of Community Financial shares are owned by company insiders. Comparatively, 1.9% of Premier Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Community Financial pays an annual dividend of $0.70 per share and has a dividend yield of 1.9%. Premier Financial pays an annual dividend of $1.20 per share and has a dividend yield of 4.6%. Community Financial pays out 15.6% of its earnings in the form of a dividend. Premier Financial pays out 39.7% 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. Community Financial has raised its dividend for 1 consecutive years and Premier Financial has raised its dividend for 12 consecutive years. Premier Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Community Financial and Premier Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Community Financial 0 1 0 0 2.00
Premier Financial 0 2 1 0 2.33

Community Financial currently has a consensus price target of $45.00, indicating a potential upside of 19.43%. Premier Financial has a consensus price target of $34.50, indicating a potential upside of 32.23%. Given Premier Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Premier Financial is more favorable than Community Financial.

Valuation & Earnings

This table compares Community Financial and Premier Financial’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Community Financial $78.46 million 2.73 $25.89 million $4.50 8.37
Premier Financial $323.54 million 2.89 $126.05 million $3.02 8.64

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

Summary

Premier Financial beats Community Financial on 13 of the 17 factors compared between the two stocks.

Community Financial Company Profile (Get Rating)

The Community Financial Corporation operates as the bank holding company for Community Bank of the Chesapeake that provides commercial and retail banking services to individuals and businesses. The company offers demand, savings, money market, and time deposit accounts, as well as certificates of deposit; and commercial real estate and other non-residential real estate, residential first mortgage, residential rental mortgage, construction and land development, home equity and second mortgage, commercial, consumer, and commercial equipment loans. It also provides safe deposit box, night depository, cash vault, automated clearinghouse transaction, wire transfer, automated teller machine (ATM), online and telephone banking, retail and business mobile banking, remote deposit capture, reciprocal deposit, merchant card, credit monitoring, investment, positive pay, payroll, account reconciliation, bill pay, credit card, and lockbox services. As of December 31, 2021, it operated 11 full services branches in Waldorf, Bryans Road, Dunkirk, Leonardtown, La Plata, Charlotte Hall, Prince Frederick, Lusby, and California, Maryland, as well as Fredericksburg, Virginia; 4 loan production offices in La Plata, Prince Frederick, and Leonardtown, Maryland, as well as Fredericksburg, Virginia; and 14 ATMs. The company was formerly known as Tri-County Financial Corporation and changed its name to The Community Financial Corporation in October 2013. The Community Financial Corporation was founded in 1950 and is headquartered in Waldorf, Maryland.

Premier Financial Company Profile (Get Rating)

Premier Financial Corp., through its subsidiaries, provides various banking services. It offers various demand, checking, money market, and savings accounts, as well as certificates of deposits and certificates of deposit account registry service; and investment products. The company also provides residential and commercial real estate, commercial, construction, home improvement and home equity, and consumer loans. In addition, it invests in the U.S. treasury and federal government agency obligations, obligations of states and political subdivisions, mortgage-backed securities that are issued by federal agencies, collateralized mortgage obligations, and corporate bonds. Further, the company offers property and casualty, life, and group health insurance agency services; mezzanine funding services; and online banking services, which include mobile banking, person-to-person payments, online bill pay, and online account opening, as well as the MoneyPass ATM network. It operates through 75 banking center offices and 12 loan offices in Ohio, Michigan, Indiana, Pennsylvania, and West Virginia. The company was formerly known as First Defiance Financial Corp. and changed its name to Premier Financial Corp. in June 2020. Premier Financial Corp. was founded in 1920 and is headquartered in Defiance, Ohio.

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