Head-To-Head Survey: Arrow Financial (NASDAQ:AROW) and Dacotah Banks (OTCMKTS:DBIN)

Arrow Financial (NASDAQ:AROW) and Dacotah Banks (OTCMKTS:DBIN) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Valuation and Earnings

This table compares Arrow Financial and Dacotah Banks”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arrow Financial	$242.58 million	2.30	$43.95 million	$2.65	12.81
Dacotah Banks	$248.97 million	1.94	$29.73 million	$3.76	11.70

Arrow Financial has higher earnings, but lower revenue than Dacotah Banks. Dacotah Banks is trading at a lower price-to-earnings ratio than Arrow Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Arrow Financial and Dacotah Banks’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arrow Financial	18.12%	10.92%	1.00%
Dacotah Banks	N/A	N/A	N/A

Volatility and Risk

Arrow Financial has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, Dacotah Banks has a beta of -0.06, indicating that its stock price is 106% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Arrow Financial and Dacotah Banks, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arrow Financial	0	3	0	0	2.00
Dacotah Banks	0	0	0	0	0.00

Arrow Financial presently has a consensus target price of $31.25, suggesting a potential downside of 7.95%. Given Arrow Financial’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Arrow Financial is more favorable than Dacotah Banks.

Institutional and Insider Ownership

46.7% of Arrow Financial shares are held by institutional investors. 3.3% of Arrow Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Arrow Financial pays an annual dividend of $1.20 per share and has a dividend yield of 3.5%. Dacotah Banks pays an annual dividend of $0.64 per share and has a dividend yield of 1.5%. Arrow Financial pays out 45.3% of its earnings in the form of a dividend. Dacotah Banks pays out 17.0% 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. Arrow Financial has increased its dividend for 7 consecutive years. Arrow Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Arrow Financial beats Dacotah Banks on 13 of the 16 factors compared between the two stocks.

About Arrow Financial

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and enhancement to commercial properties, as well as commercial construction and land development loans to finance projects. The company’s lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program. Further, the company provides retirement planning, trust, and estate administration services for individuals, as well as pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. It operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.

About Dacotah Banks

Dacotah Banks, Inc. provides various banking and financial products and services to individuals and businesses. The company provides demand and certificates of deposit; checking, individual retirement, health savings, and money market accounts; and commercial, commercial real estate, residential mortgage, and consumer loans. It also offers vehicle, boat, motorhome, mortgage, camper, motorcycle, snowmobile, jet SKI, and ATV loans; and unsecured, overdraft protection, and student loans; business, term, and small business administration loans, and other loans. In addition, the company provides credit, debit, and gift cards; mobile and online banking; auto, homeowner, health, and life insurance products; and estate, and trust services. Further, the company offers retirement planning, investment management, foundation, endowment, bill paying, charitable giving, and elder care services, as well as cash management services. Additionally, it provides offers operating lines of credit, state and federal programs, and equipment loans and leases. It also provides crop, homeowner, health, life, farm, and ranch insurance services; and farm and ranch management services. The company operates across various locations in Minnesota, North Dakota, and South Dakota. Dacotah Banks, Inc. was founded in 1955 and is headquartered in Aberdeen, South Dakota.