Merchants Bancorp (NASDAQ:MBIN – Get Free Report) and Citizens & Northern (NASDAQ:CZNC – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.
Analyst Ratings
This is a summary of recent recommendations for Merchants Bancorp and Citizens & Northern, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Merchants Bancorp | 0 | 1 | 3 | 1 | 3.00 |
| Citizens & Northern | 0 | 4 | 0 | 0 | 2.00 |
Merchants Bancorp currently has a consensus price target of $51.50, suggesting a potential downside of 5.60%. Citizens & Northern has a consensus price target of $23.50, suggesting a potential downside of 8.04%. Given Merchants Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Merchants Bancorp is more favorable than Citizens & Northern.
Earnings & Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Merchants Bancorp | $1.37 billion | 1.84 | $218.77 million | $4.98 | 10.95 |
| Citizens & Northern | $170.03 million | 2.69 | $23.43 million | $1.48 | 17.27 |
Merchants Bancorp has higher revenue and earnings than Citizens & Northern. Merchants Bancorp is trading at a lower price-to-earnings ratio than Citizens & Northern, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Merchants Bancorp has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, Citizens & Northern has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.
Dividends
Merchants Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 0.8%. Citizens & Northern pays an annual dividend of $1.12 per share and has a dividend yield of 4.4%. Merchants Bancorp pays out 8.8% of its earnings in the form of a dividend. Citizens & Northern pays out 75.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Merchants Bancorp has raised its dividend for 8 consecutive years.
Institutional & Insider Ownership
24.6% of Merchants Bancorp shares are held by institutional investors. Comparatively, 30.8% of Citizens & Northern shares are held by institutional investors. 44.9% of Merchants Bancorp shares are held by insiders. Comparatively, 4.7% of Citizens & Northern shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares Merchants Bancorp and Citizens & Northern’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Merchants Bancorp | 19.80% | 15.29% | 1.34% |
| Citizens & Northern | 13.28% | 9.71% | 1.05% |
Summary
Merchants Bancorp beats Citizens & Northern on 14 of the 18 factors compared between the two stocks.
About Merchants Bancorp
Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for multi-family and healthcare facilities. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.
About Citizens & Northern
Citizens & Northern Corp. is a holding company, which engages in community banking. It provides a full range of banking and mortgage services to individual and corporate customers in North Central Pennsylvania and Southern New York State. The firm’s lending products include mortgage loans, commercial loans, and consumer loans. Its deposit products include various types of checking accounts, passbook and statement savings, money market accounts, interest checking accounts, individual retirement accounts, and certificates of deposit. The company was founded in 1864 and is headquartered in Wellsboro, PA.
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