Contrasting Citizens & Northern (NASDAQ:CZNC) & Midland States Bancorp (NASDAQ:MSBI)

Midland States Bancorp (NASDAQ:MSBI) and Citizens & Northern (NASDAQ:CZNC) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Dividends

Midland States Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 7.9%. Citizens & Northern pays an annual dividend of $1.12 per share and has a dividend yield of 5.8%. Midland States Bancorp pays out -166.2% of its earnings in the form of a dividend. Citizens & Northern pays out 63.6% 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. Midland States Bancorp has increased its dividend for 1 consecutive years. Midland States Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Midland States Bancorp and Citizens & Northern”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Midland States Bancorp	$489.48 million	0.71	$38.04 million	($0.77)	-20.99
Citizens & Northern	$157.29 million	1.90	$25.96 million	$1.76	10.93

Midland States Bancorp has higher revenue and earnings than Citizens & Northern. Midland States Bancorp is trading at a lower price-to-earnings ratio than Citizens & Northern, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Midland States Bancorp has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, Citizens & Northern has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Midland States Bancorp and Citizens & Northern, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Midland States Bancorp	1	4	0	0	1.80
Citizens & Northern	0	4	0	0	2.00

Midland States Bancorp presently has a consensus target price of $20.75, indicating a potential upside of 28.40%. Citizens & Northern has a consensus target price of $22.00, indicating a potential upside of 14.35%. Given Midland States Bancorp’s higher probable upside, equities analysts clearly believe Midland States Bancorp is more favorable than Citizens & Northern.

Profitability

This table compares Midland States Bancorp and Citizens & Northern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Midland States Bancorp	-1.50%	-1.30%	-0.10%
Citizens & Northern	16.81%	9.86%	1.06%

Insider & Institutional Ownership

60.9% of Midland States Bancorp shares are held by institutional investors. Comparatively, 30.8% of Citizens & Northern shares are held by institutional investors. 5.3% of Midland States Bancorp shares are held by insiders. Comparatively, 4.5% of Citizens & Northern shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Midland States Bancorp beats Citizens & Northern on 9 of the 16 factors compared between the two stocks.

About Midland States Bancorp

Midland States Bancorp, Inc. operates as a financial holding company for Midland States Bank that provides various banking products and services to individuals, businesses, municipalities, and other entities. It operates through Banking, Wealth Management, and Other segments. The company provides a range of financial products and services to consumers and businesses, including commercial loans to finance agricultural equipment and production; and commercial real estate loans for owner occupied offices, warehouses and production facilities, office buildings, hotels, mixed-use residential and commercial facilities, retail centers, multifamily properties, and assisted living facilities. In addition, it offers construction and land development loans, such as real estate investment properties and residential developments, and lesser extent loans; and residential real estate loans, which includes first and second mortgage loans, and home equity lines of credit consisting of loans secured by first or second mortgages on primarily owner occupied primary residences. The company also provides consumer installment loans for the purchase of cars, boats and other recreational vehicles, as well as for the purchase of major appliances and other home improvement projects; and commercial equipment leasing programs for manufacturing, construction, transportation, and healthcare industries. Further, it offers merchant services; deposit products, including checking, time, savings, money market, and certificates of deposit, as well as sweep accounts; letters of credit; and trust and wealth management services, such as financial and estate planning, trustee and custodial, investment management, tax, insurance, and business planning, corporate retirement plan consulting and administration, and retail brokerage services. The company was founded in 1881 and is headquartered in Effingham, Illinois.

About Citizens & Northern

Citizens & Northern Corp. is a holding company, which engages in community banking. It provides a full range of banking and mortgage services to individual and corporate customers in North Central Pennsylvania and Southern New York State. The firm’s lending products include mortgage loans, commercial loans, and consumer loans. Its deposit products include various types of checking accounts, passbook and statement savings, money market accounts, interest checking accounts, individual retirement accounts, and certificates of deposit. The company was founded in 1864 and is headquartered in Wellsboro, PA.