CB Financial Services (NASDAQ:CBFV) and Hawthorn Bancshares (NASDAQ:HWBK) Critical Review

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

Volatility & Risk

CB Financial Services has a beta of 0.29, indicating that its share price is 71% less volatile than the S&P 500. Comparatively, Hawthorn Bancshares has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.

Dividends

CB Financial Services pays an annual dividend of $1.04 per share and has a dividend yield of 2.9%. Hawthorn Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 2.3%. CB Financial Services pays out 216.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hawthorn Bancshares pays out 25.1% of its earnings in the form of a dividend. Hawthorn Bancshares has raised its dividend for 5 consecutive years.

Insider & Institutional Ownership

33.1% of CB Financial Services shares are held by institutional investors. Comparatively, 30.7% of Hawthorn Bancshares shares are held by institutional investors. 9.7% of CB Financial Services shares are held by company insiders. Comparatively, 22.7% of Hawthorn Bancshares shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CB Financial Services	3.37%	8.42%	0.83%
Hawthorn Bancshares	20.09%	14.22%	1.18%

Valuation and Earnings

This table compares CB Financial Services and Hawthorn Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CB Financial Services	$81.62 million	2.19	$12.59 million	$0.48	74.27
Hawthorn Bancshares	$109.67 million	2.21	$18.26 million	$3.19	11.00

Hawthorn Bancshares has higher revenue and earnings than CB Financial Services. Hawthorn 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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for CB Financial Services and Hawthorn Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CB Financial Services	0	2	1	0	2.33
Hawthorn Bancshares	0	1	0	0	2.00

CB Financial Services presently has a consensus price target of $36.00, suggesting a potential upside of 0.98%. Given CB Financial Services’ stronger consensus rating and higher probable upside, equities research analysts plainly believe CB Financial Services is more favorable than Hawthorn Bancshares.

Summary

Hawthorn Bancshares beats CB Financial Services on 11 of the 17 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 Hawthorn Bancshares

Hawthorn Bancshares, Inc. operates as the bank holding company for Hawthorn Bank that provides various banking services in the United States. It accepts checking, savings, money market, individual retirement, and other time deposit accounts, as well as certificates of deposit. The company also offers commercial and industrial, single payment personal, installment, commercial and residential real estate, and consumer loans, as well as equipment, operating, and small business administration loans; and debit and credit cards. In addition, it provides trust services that include estate planning, investment, and asset management services; and cash management, safety deposit box, brokerage, and Internet banking services. Hawthorn Bancshares, Inc. was founded in 1865 and is headquartered in Jefferson City, Missouri.