Financial Analysis: Bank of the James Financial Group (NASDAQ:BOTJ) versus Auburn National Bancorporation (NASDAQ:AUBN)

Auburn National Bancorporation (NASDAQ:AUBN) and Bank of the James Financial Group (NASDAQ:BOTJ) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.

Valuation and Earnings

This table compares Auburn National Bancorporation and Bank of the James Financial Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Auburn National Bancorporation	$32.79 million	2.62	$7.26 million	$2.08	11.81
Bank of the James Financial Group	$62.51 million	N/A	$9.02 million	$2.00	10.47

Bank of the James Financial Group has higher revenue and earnings than Auburn National Bancorporation. Bank of the James Financial Group is trading at a lower price-to-earnings ratio than Auburn National Bancorporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Auburn National Bancorporation and Bank of the James Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Auburn National Bancorporation	16.42%	8.41%	0.72%
Bank of the James Financial Group	14.43%	12.47%	0.89%

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Auburn National Bancorporation and Bank of the James Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Auburn National Bancorporation	0	1	0	0	2.00
Bank of the James Financial Group	0	1	0	0	2.00

Insider & Institutional Ownership

39.5% of Auburn National Bancorporation shares are owned by institutional investors. Comparatively, 18.5% of Bank of the James Financial Group shares are owned by institutional investors. 25.1% of Auburn National Bancorporation shares are owned by insiders. Comparatively, 15.4% of Bank of the James Financial Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 4.4%. Bank of the James Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.9%. Auburn National Bancorporation pays out 51.9% of its earnings in the form of a dividend. Bank of the James Financial Group pays out 20.0% 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. Bank of the James Financial Group has raised its dividend for 5 consecutive years.

Risk and Volatility

Auburn National Bancorporation has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Bank of the James Financial Group has a beta of 0.12, meaning that its stock price is 88% less volatile than the S&P 500.

Summary

Auburn National Bancorporation beats Bank of the James Financial Group on 7 of the 13 factors compared between the two stocks.

About Auburn National Bancorporation

Auburn National Bancorporation, Inc. operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company offers checking, savings, and transaction deposit accounts, as well as certificates of deposit. It also provides commercial, financial, agricultural, real estate construction, and consumer loan products; and other financial services. In addition, the company offers automated teller services; debit cards; online banking, bill payment, and other electronic banking services; and safe deposit boxes. Auburn National Bancorporation, Inc. was founded in 1907 and is headquartered in Auburn, Alabama.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also provides loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it offers other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company provides mortgage banking; investment advisory services; securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1999 and is headquartered in Lynchburg, Virginia.