Reviewing Norwood Financial (NASDAQ:NWFL) & CNB Financial (NASDAQ:CCNE)

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

Dividends

CNB Financial pays an annual dividend of $0.72 per share and has a dividend yield of 2.6%. Norwood Financial pays an annual dividend of $1.28 per share and has a dividend yield of 4.2%. CNB Financial pays out 29.6% of its earnings in the form of a dividend. Norwood Financial pays out 42.8% 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. CNB Financial has increased its dividend for 1 consecutive years and 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.

Insider and Institutional Ownership

52.4% of CNB Financial shares are owned by institutional investors. Comparatively, 28.1% of Norwood Financial shares are owned by institutional investors. 2.8% of CNB Financial 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, endowments and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

CNB Financial has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500. Comparatively, Norwood Financial has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for CNB Financial and Norwood Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNB Financial	0	2	1	1	2.75
Norwood Financial	0	3	0	0	2.00

CNB Financial currently has a consensus price target of $27.75, suggesting a potential upside of 0.18%. Norwood Financial has a consensus price target of $26.50, suggesting a potential downside of 12.91%. Given CNB Financial’s stronger consensus rating and higher possible upside, equities research analysts clearly believe CNB Financial is more favorable than Norwood Financial.

Earnings & Valuation

This table compares CNB Financial and Norwood Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CNB Financial	$432.51 million	1.89	$54.58 million	$2.43	11.40
Norwood Financial	$136.15 million	2.07	$27.75 million	$2.99	10.18

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CNB Financial	15.29%	11.83%	1.10%
Norwood Financial	20.39%	12.60%	1.20%

Summary

CNB Financial beats Norwood Financial on 10 of the 18 factors compared between the two stocks.

About CNB Financial

CNB Financial Corporation operates as the bank holding company for CNB Bank that provides a range of banking products and services for individual, business, governmental, and institutional customers. The company accepts checking, savings, and time deposit accounts; and offers real estate, commercial, industrial, residential, and consumer loans, as well as various other specialized financial services. It also provides private banking; and wealth and asset management services, including the administration of trusts and estates, retirement plans, and other employee benefit plans, as well as a range of wealth management services. In addition, the company invests in debt and equity securities; sells nonproprietary annuities and other insurance products; and offers small balance unsecured loans and secured loans primarily collateralized by automobiles and equipment, as well as engages in consumer discount loan and finance business. The company was founded in 1865 and is headquartered in Clearfield, 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.