Head to Head Survey: Community Financial System (NYSE:CBU) and NewtekOne (NASDAQ:NEWT)

NewtekOne (NASDAQ:NEWT) and Community Financial System (NYSE:CBU) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.

Volatility and Risk

NewtekOne has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Community Financial System has a beta of 0.79, meaning that its stock price is 21% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NewtekOne	15.51%	19.52%	2.68%
Community Financial System	20.82%	11.09%	1.26%

Dividends

NewtekOne pays an annual dividend of $0.76 per share and has a dividend yield of 5.6%. Community Financial System pays an annual dividend of $1.88 per share and has a dividend yield of 3.0%. NewtekOne pays out 34.7% of its earnings in the form of a dividend. Community Financial System pays out 47.4% 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. NewtekOne has increased its dividend for 1 consecutive years and Community Financial System has increased its dividend for 33 consecutive years. NewtekOne is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

38.4% of NewtekOne shares are owned by institutional investors. Comparatively, 73.8% of Community Financial System shares are owned by institutional investors. 6.7% of NewtekOne shares are owned by insiders. Comparatively, 1.0% of Community Financial System shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for NewtekOne and Community Financial System, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NewtekOne	0	4	0	1	2.40
Community Financial System	0	4	0	0	2.00

NewtekOne presently has a consensus price target of $14.75, suggesting a potential upside of 9.34%. Community Financial System has a consensus price target of $64.00, suggesting a potential upside of 2.37%. Given NewtekOne’s stronger consensus rating and higher probable upside, equities research analysts clearly believe NewtekOne is more favorable than Community Financial System.

Valuation and Earnings

This table compares NewtekOne and Community Financial System”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NewtekOne	$383.33 million	1.02	$50.85 million	$2.19	6.16
Community Financial System	$1.01 billion	3.26	$182.48 million	$3.97	15.75

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

Summary

NewtekOne beats Community Financial System on 9 of the 17 factors compared between the two stocks.

About NewtekOne

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that engages in the provision of various business and financial solutions under the Newtek brand name to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including SBA loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based Point of Sale systems for a various restaurant, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners. Further, the company provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients as well as SMBs. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, Florida.

About Community Financial 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.