Critical Comparison: Norwood Financial (NASDAQ:NWFL) & Citizens Financial Services (NASDAQ:CZFS)

Citizens Financial Services (NASDAQ:CZFS) and Norwood Financial (NASDAQ:NWFL) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Analyst Ratings

This is a summary of current ratings and recommmendations for Citizens Financial Services and Norwood Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens Financial Services	0	0	0	0	0.00
Norwood Financial	0	2	1	0	2.33

Norwood Financial has a consensus price target of $28.17, indicating a potential upside of 10.89%. Given Norwood Financial’s stronger consensus rating and higher possible upside, analysts plainly believe Norwood Financial is more favorable than Citizens Financial Services.

Profitability

This table compares Citizens Financial Services and Norwood Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citizens Financial Services	16.79%	9.83%	0.98%
Norwood Financial	1.12%	8.35%	0.74%

Volatility and Risk

Citizens Financial Services has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, Norwood Financial has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Valuation & Earnings

This table compares Citizens Financial Services and Norwood Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens Financial Services	$169.72 million	1.58	$27.82 million	$5.98	9.41
Norwood Financial	$101.43 million	2.32	-$160,000.00	$0.09	282.22

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

Institutional and Insider Ownership

22.5% of Citizens Financial Services shares are owned by institutional investors. Comparatively, 28.1% of Norwood Financial shares are owned by institutional investors. 6.1% of Citizens Financial Services shares are owned by insiders. Comparatively, 9.1% of Norwood Financial 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.

Dividends

Citizens Financial Services pays an annual dividend of $1.98 per share and has a dividend yield of 3.5%. Norwood Financial pays an annual dividend of $1.24 per share and has a dividend yield of 4.9%. Citizens Financial Services pays out 33.1% of its earnings in the form of a dividend. Norwood Financial pays out 1,377.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Norwood Financial has increased its dividend for 7 consecutive years. Norwood Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Norwood Financial beats Citizens Financial Services on 10 of the 17 factors compared between the two stocks.

About Citizens Financial Services

Citizens Financial Services, Inc., a bank holding company, provides various banking products and services for individual, business, governmental, and institutional customers. The company accepts various deposit products, such as checking, savings, and time deposit accounts. Its loan products include residential, commercial, and agricultural real estate loans; commercial and industrial loans; state and political subdivision loans; and consumer loans, as well as various other specialized financial services. The company also provides professional trust administration, investment management services, estate planning and administration, custody of securities, and individual retirement accounts. In addition, it offers brokerage and financial planning services, as well as assistance in various oil and gas leasing matters; and provides mutual funds, annuities, and health and life insurance products. Citizens Financial Services, Inc. was incorporated in 1984 and is headquartered in Mansfield, Pennsylvania.

About Norwood Financial

Norwood Financial Corp. operates as the bank holding company for Wayne Bank that provides various banking products and services. The company accepts a range of deposit products, including interest-bearing and non-interest-bearing transaction accounts, and statement savings and money market accounts, as well as certificate of deposits. It also provides commercial loans comprising lines of credit, revolving credit, term loans, mortgages, secured lending products, and letter of credit facilities; municipal finance lending; construction loans for commercial construction projects and single-family residences; land loans; construction financing; consumer loans; mortgage lending to finance principal residences and second home dwellings; and indirect dealer financing of new and used automobiles, boats, and recreational vehicles. In addition, the company offers investment securities services; personal and business credit services; trust and investment products; and cash management, direct deposit, remote deposit capture, mobile deposit capture, automated clearing house activity, real estate settlement, and Internet and mobile banking services. Further, it engages in the annuity and mutual fund sale, and discount brokerage activities, as well as insurance agency business. The company serves consumers, businesses, nonprofit organizations, and municipalities. It operates branches in Northeastern Pennsylvania; and in Delaware, Sullivan, Ontario, Otsego, and Yates Counties, New York, as well as automated teller machines. Norwood Financial Corp. was founded in 1870 and is headquartered in Honesdale, Pennsylvania.