Contrasting First Defiance Financial (NASDAQ:FDEF) & Cortland Bancorp (NASDAQ:CLDB)

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

Risk & Volatility

First Defiance Financial has a beta of 0.96, indicating that its stock price is 4% less volatile than the S&P 500. Comparatively, Cortland Bancorp has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500.

Institutional and Insider Ownership

64.2% of First Defiance Financial shares are held by institutional investors. Comparatively, 1.6% of Cortland Bancorp shares are held by institutional investors. 2.4% of First Defiance Financial shares are held by company insiders. Comparatively, 9.5% of Cortland Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares First Defiance Financial and Cortland Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Defiance Financial $163.93 million 3.24 $46.25 million $2.23 12.08
Cortland Bancorp $33.46 million 2.94 $8.84 million N/A N/A

First Defiance Financial has higher revenue and earnings than Cortland Bancorp.

Dividends

First Defiance Financial pays an annual dividend of $0.76 per share and has a dividend yield of 2.8%. Cortland Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 2.0%. First Defiance Financial pays out 34.1% of its earnings in the form of a dividend. First Defiance Financial has increased its dividend for 6 consecutive years. First Defiance Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current recommendations and price targets for First Defiance Financial and Cortland Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Defiance Financial 0 0 1 0 3.00
Cortland Bancorp 0 0 0 0 N/A

First Defiance Financial presently has a consensus target price of $33.00, suggesting a potential upside of 22.54%. Given First Defiance Financial’s higher probable upside, analysts plainly believe First Defiance Financial is more favorable than Cortland Bancorp.

Profitability

This table compares First Defiance Financial and Cortland Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Defiance Financial 27.02% 11.72% 1.47%
Cortland Bancorp 26.40% 14.41% 1.32%

Summary

First Defiance Financial beats Cortland Bancorp on 12 of the 15 factors compared between the two stocks.

About First Defiance Financial

First Defiance Financial Corp. operates as a unitary thrift holding company that provides community-based financial services in northwest Ohio, northeast Indiana, and southeastern Michigan. It offers checking accounts, money market accounts, savings accounts, term certificate accounts, demand deposits, and certificates of deposits, as well as certificate of deposit account registry service; and commercial real estate, commercial, consumer finance, 1-4 family residential real estate, construction, and home equity and improvement loans. The company also provides trust and wealth management, and online banking services. In addition, it sells various property and casualty, group health and life, and individual health and life insurance products. The company operates through 44 full service banking centers and 1 loan production office. First Defiance Financial Corp. was incorporated in 1995 and is headquartered in Defiance, Ohio.

About Cortland Bancorp

Cortland Bancorp operates as the bank holding company for The Cortland Savings and Banking Company that provides commercial and retail banking services in Northeastern Ohio and Western Pennsylvania. Its deposit products include demand deposits, savings, money market, time deposit, and checking accounts. The company's loan portfolio comprises commercial loans consisting of commercial, financial loans, real estate construction and development loans, commercial real estate loans, small business lending, and trade financing; and consumer loans, such as residential real estate, home equity, and installment loans. It also provides brokerage and investment services; asset management services; night depository services, automated teller services, safe deposit boxes, and other services; and Internet and mobile banking options. As of February 4, 2019, it operated through 14 offices located in the Summit, Trumbull, Mahoning, Portage, and Ashtabula counties in Northeast Ohio. The company was founded in 1892 and is headquartered in Cortland, Ohio.

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