Financial Contrast: American Bank (OTCMKTS:AMBK) versus Community Bank System (NYSE:CBU)

Community Bank System (NYSE:CBU) and American Bank (OTCMKTS:AMBK) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.

Risk & Volatility

Community Bank System has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500. Comparatively, American Bank has a beta of 0.06, indicating that its share price is 94% less volatile than the S&P 500.

Dividends

Community Bank System pays an annual dividend of $1.80 per share and has a dividend yield of 3.8%. American Bank pays an annual dividend of $0.56 per share and has a dividend yield of 3.4%. Community Bank System pays out 56.6% of its earnings in the form of a dividend. Community Bank System has increased its dividend for 32 consecutive years. Community Bank System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Community Bank System and American Bank’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Bank System	$704.87 million	3.54	$131.92 million	$3.18	14.86
American Bank	N/A	N/A	N/A	N/A	N/A

Community Bank System has higher revenue and earnings than American Bank.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Community Bank System and American Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Bank System	1	1	2	0	2.25
American Bank	0	0	0	0	N/A

Community Bank System currently has a consensus target price of $47.67, indicating a potential upside of 0.84%. Given Community Bank System’s higher probable upside, research analysts plainly believe Community Bank System is more favorable than American Bank.

Institutional & Insider Ownership

73.8% of Community Bank System shares are owned by institutional investors. 1.9% of Community Bank System shares are owned 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.

Profitability

This table compares Community Bank System and American Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community Bank System	16.59%	8.93%	0.94%
American Bank	N/A	N/A	N/A

Summary

Community Bank System beats American Bank on 11 of the 12 factors compared between the two stocks.

About Community Bank System

Community Bank System, Inc. operates as the bank holding company for Community Bank, N.A. that provides various banking and other financial services to retail, commercial, institutional, and municipal customers. It operates through three segments: Banking, Employee Benefit Services, and All Other. The company offers various deposits products, such as interest and noninterest -bearing checking, savings, and money market deposit accounts, as well as time deposits. It also provides loans, including consumer mortgages; general purpose commercial and industrial loans, and mortgages on commercial properties; paycheck protection program loans; installment loans that are originated through selected dealerships and are secured by automobiles, marine, and other recreational vehicles; personal installment loans and check credit lines of credit for consumers; and home equity products. In addition, the company offers broker-dealer and investment advisory; cash management, investment, and treasury services; asset management services; and employee benefit services, as well as operates as a full-service insurance agency that provides personal and commercial lines of insurance, and other risk management products and services. Further, it offers contribution plan administration, employee benefit trust, collective investment fund, retirement plan administration and benefit consulting, fund administration, transfer agency, actuarial and benefit consulting, and health and welfare consulting services; and act as an investor in residential and commercial real estate activities. Additionally, the company offers wealth management, retirement planning, higher educational planning, fiduciary, risk management, trust, and personal financial planning services; and investment alternatives, including stocks, bonds, mutual funds, and insurance and advisory products, as well as master recordkeeping services. Community Bank System, Inc. was founded in 1866 and is headquartered in DeWitt, New York.

About American Bank

American Bank Incorporated operates as the bank holding company for American Bank that provides various banking products and services to consumer, business, institutional, and governmental customers. It accepts a range of interest-bearing checking and money market accounts, savings accounts, certificates of deposit, and individual retirement accounts. The company also offers commercial, industrial, and other loans; commercial mortgage loans; commercial construction loans; residential mortgage loans; and consumer loans, including personal term loans, personal credit lines, automobile loans, home equity loans, and home equity lines of credit and loans. In addition, it provides online or mobile banking, automated teller machine, safe deposit box rental, and wire transfer services, as well as sells checks and checkbooks, and purchases investment securities. The company operates an office located in Allentown, Pennsylvania; and a loan production office in Blue Bell, Pennsylvania. The company was founded in 1997 and is based in Allentown, Pennsylvania.