Camden National (NASDAQ:CAC) and Southern Michigan Bancorp (OTCMKTS:SOMC) Critical Comparison

Camden National (NASDAQ:CAC) and Southern Michigan Bancorp (OTCMKTS:SOMC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, analyst recommendations and institutional ownership.

Insider and Institutional Ownership

77.4% of Camden National shares are held by institutional investors. 1.7% of Camden National shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Camden National and Southern Michigan Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Camden National	0	3	2	0	2.40
Southern Michigan Bancorp	0	0	0	0	0.00

Camden National presently has a consensus target price of $48.00, suggesting a potential upside of 30.47%. Given Camden National’s stronger consensus rating and higher probable upside, analysts clearly believe Camden National is more favorable than Southern Michigan Bancorp.

Profitability

This table compares Camden National and Southern Michigan Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Camden National	14.77%	10.19%	0.94%
Southern Michigan Bancorp	13.02%	10.51%	0.75%

Volatility and Risk

Camden National has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, Southern Michigan Bancorp has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500.

Dividends

Camden National pays an annual dividend of $1.68 per share and has a dividend yield of 4.6%. Southern Michigan Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.6%. Camden National pays out 53.2% of its earnings in the form of a dividend. Southern Michigan Bancorp pays out 25.6% 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.

Valuation & Earnings

This table compares Camden National and Southern Michigan Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Camden National	$294.10 million	2.12	$53.00 million	$3.16	11.64
Southern Michigan Bancorp	$84.61 million	1.36	$10.40 million	$2.50	9.97

Camden National has higher revenue and earnings than Southern Michigan Bancorp. Southern Michigan Bancorp is trading at a lower price-to-earnings ratio than Camden National, indicating that it is currently the more affordable of the two stocks.

Summary

Camden National beats Southern Michigan Bancorp on 14 of the 16 factors compared between the two stocks.

About Camden National

Camden National Corporation operates as the bank holding company for Camden National Bank that provides various commercial and consumer banking products and services for consumer, institutional, municipal, non-profit, and commercial customers in Maine, New Hampshire, and Massachusetts. The company accepts checking, savings, time, and brokered deposits, as well as deposits with the certificate of deposit account registry system. Its loan products include non-owner-occupied commercial estate loans, owner-occupied commercial real estate loans, unsecured fully-guaranteed commercial loans backed by the small business administration, loans secured by one-to four-family properties, and consumer and home equity loans. The company also provides brokerage and insurance services through its financial offerings consisting of college, retirement, estate planning, mutual funds, strategic asset management accounts, and variable and fixed annuities. Further, it offers a range of fiduciary and asset management, wealth management, investment management, financial planning, and trustee services. Camden National Corporation was founded in 1875 and is headquartered in Camden, Maine.

About Southern Michigan Bancorp

Southern Michigan Bancorp, Inc. operates as the bank holding company for Southern Michigan Bank & Trust that provides a range of commercial banking services to individuals, businesses, institutions, and governmental agencies primarily in the southwest Michigan communities. Its deposit products include interest and non-interest checking, savings, and various types of money market accounts; time, savings, and demand deposits; and certificates of deposit and IRAs. The company also provides home mortgages and equity loans, home equity lines of credit, VA and FHA home loans, USDA rural development loans, and auto/personal loans; business loans, such as lines of credit, term loans, commercial real estate loans, commercial and industrial loans, agriculture loans, letters of credit, small business administration loans, and capital access loans; industrial, construction, real estate, and inventory loans; and consumer lending products comprising direct and indirect loans to purchasers of residential real property and consumer goods. In addition, it offers trust and investment services that include investment management, trustee, IRA rollovers and retirement plan, institutional and personal custody, estate settlement, wealth management, estate and wealth transfer planning assistance, charitable gift planning assistance, and cash management custody services; and safe deposit box and automated teller machine services. Further, the company provides bill pay, e-statements, ACH, wire transfer, remote deposit capture, and insurance services, as well as ATM, debit, credit, and gift cards. The company was founded in 1871 and is based in Coldwater, Michigan.