Financial Analysis: CB Financial Services (NASDAQ:CBFV) versus Potomac Bancshares (OTCMKTS:PTBS)

CB Financial Services (NASDAQ:CBFV) and Potomac Bancshares (OTCMKTS:PTBS) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, institutional ownership, risk, valuation, analyst recommendations, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for CB Financial Services and Potomac Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CB Financial Services	0	2	2	0	2.50
Potomac Bancshares	0	0	0	0	0.00

CB Financial Services currently has a consensus price target of $41.00, suggesting a potential upside of 12.11%. Given CB Financial Services’ stronger consensus rating and higher probable upside, analysts clearly believe CB Financial Services is more favorable than Potomac Bancshares.

Profitability

This table compares CB Financial Services and Potomac Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CB Financial Services	6.09%	9.49%	0.94%
Potomac Bancshares	N/A	N/A	N/A

Dividends

CB Financial Services pays an annual dividend of $1.12 per share and has a dividend yield of 3.1%. Potomac Bancshares pays an annual dividend of $0.52 per share and has a dividend yield of 2.6%. CB Financial Services pays out 123.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Potomac Bancshares pays out 24.1% of its earnings in the form of a dividend.

Risk and Volatility

CB Financial Services has a beta of 0.27, meaning that its stock price is 73% less volatile than the S&P 500. Comparatively, Potomac Bancshares has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500.

Institutional & Insider Ownership

33.1% of CB Financial Services shares are owned by institutional investors. Comparatively, 5.3% of Potomac Bancshares shares are owned by institutional investors. 9.7% of CB Financial Services shares are owned by insiders. Comparatively, 4.4% of Potomac Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares CB Financial Services and Potomac Bancshares”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CB Financial Services	$41.50 million	4.47	$4.90 million	$0.91	40.19
Potomac Bancshares	$54.90 million	1.62	$9.70 million	$2.16	9.14

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

Summary

CB Financial Services beats Potomac Bancshares on 12 of the 16 factors compared between the two stocks.

About CB Financial Services

CB Financial Services, Inc. operates as the bank holding company for Community Bank that provides various banking products and services for individuals and businesses in southwestern Pennsylvania, West Virginia, and Ohio. The company's primary deposit products include demand deposits, NOW accounts, money market accounts, and savings accounts, as well as time deposit products. Its loan products comprise residential real estate loans, such as one- to four-family mortgage loans, home equity installment loans, and home equity lines of credit; commercial real estate loans that are secured primarily by improved properties, such as retail facilities, office buildings, and other non-residential buildings; construction loans to individuals to finance the construction of residential dwellings, as well as for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses; commercial and industrial loans, and lines of credit; consumer loans consisting of indirect auto loans, secured and unsecured loans, and lines of credit; and other loans. In addition, the company conducts insurance agency activities by offering property and casualty, commercial liability, surety, and other insurance products. The company was founded in 1901 and is headquartered in Carmichaels, Pennsylvania.

About Potomac Bancshares

Potomac Bancshares, Inc. operates as the bank holding company for Bank of Charles Town that provides various banking products and services to individuals and businesses. The company offers checking, savings, and individual retirement accounts; and certificates of deposit (CD). It also provides personal loans, including new and used vehicle, home equity, unsecured home improvement and personal, retail equipment, and lot loans, as well as loans secured by CD, and home equity lines of credit; commercial loans for building or office purchases, commercial real estate and construction, and production and administrative equipment purchases; lines of credit; mortgage, commercial, term, residential and commercial construction, commercial real estate, and agricultural loans; and credit and debit cards. In addition, the company offers Card Pay, cash management, merchant, financial planning, trust and estate, investment management, wealth management, full-service brokerage, retirement and insurance planning and products, asset allocation and management, and college planning services, as well as telephone, mobile, and online banking services. Potomac Bancshares, Inc. was founded in 1871 and is based in Charles Town, West Virginia.