Financial Survey: Carter Bankshares (NASDAQ:CARE) versus Freedom Financial (OTCMKTS:FDVA)

Carter Bankshares (NASDAQ:CARE) and Freedom Financial (OTCMKTS:FDVA) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Institutional and Insider Ownership

41.5% of Carter Bankshares shares are owned by institutional investors. 2.2% of Carter Bankshares shares are owned by insiders. Comparatively, 13.3% of Freedom Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Carter Bankshares has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500. Comparatively, Freedom Financial has a beta of 0.2, suggesting that its stock price is 80% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Carter Bankshares and Freedom Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Carter Bankshares	0	0	2	0	3.00
Freedom Financial	0	0	0	0	0.00

Carter Bankshares currently has a consensus price target of $21.50, suggesting a potential upside of 10.43%. Given Carter Bankshares’ stronger consensus rating and higher possible upside, equities analysts clearly believe Carter Bankshares is more favorable than Freedom Financial.

Profitability

This table compares Carter Bankshares and Freedom Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Carter Bankshares	12.58%	7.68%	0.65%
Freedom Financial	6.54%	5.21%	0.40%

Earnings and Valuation

This table compares Carter Bankshares and Freedom Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Carter Bankshares	$243.10 million	1.82	$24.27 million	$1.36	14.32
Freedom Financial	$66.41 million	1.28	$4.71 million	$0.60	19.83

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

Summary

Carter Bankshares beats Freedom Financial on 12 of the 14 factors compared between the two stocks.

About Carter Bankshares

Carter Bankshares, Inc. operates as the bank holding company for Carter Bank & Trust that provides various banking products and services in the United States. It accepts various deposit products, including checking, savings, retirement, and money market accounts, as well as certificates of deposits. The company also offers commercial loans comprising secured and unsecured loans; consumer loans, such as secured and unsecured loans for financing automobiles, home improvements, education, overdraft protection, and personal investments, as well as residential mortgages; real estate construction, acquisition, commercial, and industrial loans; home equity lines of credit; and credit cards, as well as originates and holds fixed and variable rate mortgage loans. In addition, it provides other banking services that include safe deposit boxes, direct deposit of payroll, and social security checks; online banking products, including online and mobile banking, online account opening, bill pay, e-statement, mobile deposit, digital wallet, and ATM services; title insurance and other financial institution-related products and services; and treasury and corporate cash management services. Carter Bankshares, Inc. was founded in 1974 and is headquartered in Martinsville, Virginia.

About Freedom Financial

Freedom Financial Holdings, Inc. operates as the bank holding company for The Freedom Bank of Virginia that provides commercial banking, personal banking, and mortgage banking solutions. The company offers personal and business checking accounts, interest bearing business savings accounts, money market accounts, personal savings accounts, certificates of deposits, and IRAs, as well as insured cash sweep and certificate of deposit account registry services. It also provides business term, personal, and mortgage loans; commercial lines of credit; commercial real estate mortgage and small business lending services; home equity lines; and credit cards. In addition, the company offers treasury management, online and mobile banking, remote deposit capture, ACH, and wire transfer services; business valuation, bank-at-work, and merchant services; and prestige banking services. The company was founded in 2001 and is headquartered in Fairfax, Virginia.