Community Heritage Financial (OTCMKTS:CMHF) vs. Capital Bancorp (NASDAQ:CBNK) Head-To-Head Analysis

Capital Bancorp (NASDAQ:CBNK) and Community Heritage Financial (OTCMKTS:CMHF) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares Capital Bancorp and Community Heritage Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital Bancorp	18.44%	14.76%	1.67%
Community Heritage Financial	N/A	N/A	N/A

Volatility and Risk

Capital Bancorp has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500. Comparatively, Community Heritage Financial has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500.

Dividends

Capital Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.5%. Community Heritage Financial pays an annual dividend of $0.32 per share and has a dividend yield of 1.0%. Capital Bancorp pays out 14.1% of its earnings in the form of a dividend. Community Heritage Financial pays out 10.9% 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. Capital Bancorp has increased its dividend for 3 consecutive years. Capital Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for Capital Bancorp and Community Heritage Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital Bancorp	0	3	2	0	2.40
Community Heritage Financial	0	0	0	0	0.00

Capital Bancorp currently has a consensus target price of $34.67, indicating a potential upside of 9.84%. Given Capital Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Capital Bancorp is more favorable than Community Heritage Financial.

Institutional and Insider Ownership

56.1% of Capital Bancorp shares are owned by institutional investors. Comparatively, 12.2% of Community Heritage Financial shares are owned by institutional investors. 31.6% of Capital Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Capital Bancorp and Community Heritage Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital Bancorp	$310.06 million	1.68	$57.17 million	$3.40	9.28
Community Heritage Financial	$60.49 million	1.50	$8.61 million	$2.94	10.51

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

Summary

Capital Bancorp beats Community Heritage Financial on 15 of the 17 factors compared between the two stocks.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.

About Community Heritage Financial

Community Heritage Financial, Inc. operates as the bank holding company for Middletown Valley Bank that provides retail and commercial banking services to individuals and businesses in Frederick and Washington counties in Maryland and Franklin County, Pennsylvania. Its primary deposit products include demand, savings, and time deposits, as well as lending products comprise real estate mortgages, commercial business loans, and instalment loans. The company also offers mortgage financing, new home purchases, refinancing, and construction lending in Middletown, Crofton, and Oakland, Maryland. The company was founded in 1908 and is based in Middletown, Maryland.