Critical Contrast: Republic Bancorp (NASDAQ:RBCAA) vs. C&F Financial (NASDAQ:CFFI)

Republic Bancorp (NASDAQ:RBCAA) and C&F Financial (NASDAQ:CFFI) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Republic Bancorp and C&F Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Republic Bancorp	0	2	1	0	2.33
C&F Financial	0	1	0	0	2.00

Republic Bancorp currently has a consensus price target of $69.00, indicating a potential downside of 4.78%. Given Republic Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Republic Bancorp is more favorable than C&F Financial.

Dividends

Republic Bancorp pays an annual dividend of $1.98 per share and has a dividend yield of 2.7%. C&F Financial pays an annual dividend of $1.92 per share and has a dividend yield of 2.5%. Republic Bancorp pays out 29.5% of its earnings in the form of a dividend. C&F Financial pays out 23.2% 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. Republic Bancorp has increased its dividend for 27 consecutive years and C&F Financial has increased its dividend for 1 consecutive years. Republic Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Republic Bancorp has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, C&F Financial has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500.

Valuation & Earnings

This table compares Republic Bancorp and C&F Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Republic Bancorp	$521.34 million	2.73	$131.32 million	$6.72	10.78
C&F Financial	$186.13 million	1.34	$26.83 million	$8.28	9.21

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

Profitability

This table compares Republic Bancorp and C&F Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Republic Bancorp	25.19%	12.27%	1.87%
C&F Financial	14.43%	10.82%	1.00%

Insider and Institutional Ownership

24.4% of Republic Bancorp shares are held by institutional investors. Comparatively, 37.2% of C&F Financial shares are held by institutional investors. 55.9% of Republic Bancorp shares are held by insiders. Comparatively, 6.4% of C&F Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Republic Bancorp beats C&F Financial on 14 of the 17 factors compared between the two stocks.

About Republic Bancorp

Republic Bancorp, Inc. operates as a bank holding company for Republic Bank & Trust Company that provides various banking products and services in the United States. It operates in six segments: Traditional Banking, Warehouse, Mortgage Banking, Tax Refund Solutions, Republic Payment Solutions, and Republic Credit Solutions. The company offers demand, money market accounts, savings, individual retirement accounts, time, brokered, and other certificates of deposit; and retail and commercial mortgage, construction and land development, consumer, aircraft, and marine loans. It also provides credit cards; title insurance and other financial products and services; and private banking, lockbox processing, remote deposit capture, business online banking, account reconciliation, automated clearing house processing, and internet and mobile banking services. In addition, it offers short-term and revolving credit facilities to mortgage bankers through mortgage warehouse lines of credit; mortgage banking; tax refund solutions, which facilitate the receipt and payment of federal and state tax refund products through third-party tax preparers and tax-preparation software providers; payments-related products and services to consumers through third party service providers; and consumer credit products. The company offers its services through full-services banking centers in Kentucky, Indiana, Florida, Ohio, and Tennessee. Republic Bancorp, Inc. was incorporated in 1974 and is headquartered in Louisville, Kentucky.

About C&F Financial

C&F Financial Corp. is a bank holding company, which engages in the provision of banking services to individuals and businesses. It operates through the following segments: Community Banking, Mortgage Banking and Consumer Finance. The Community Banking segment provides checking and savings deposit accounts, business, real estate, development, mortgage, home equity, and installment loans. The Mortgage Banking segment offers ancillary mortgage loan origination services for loan settlement and residential appraisals. The Consumer Finance segment consists of automobile financing through lending programs that are designed to serve customers in the non-prime market who have limited access to traditional automobile financing. The company was founded on March 8, 1994 and is headquartered in Toano, VA.