Financial Review: Banco Bradesco (NYSE:BBD) and Citizens & Northern (NASDAQ:CZNC)

Citizens & Northern (NASDAQ:CZNC) and Banco Bradesco (NYSE:BBD) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Risk and Volatility

Citizens & Northern has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, Banco Bradesco has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Dividends

Citizens & Northern pays an annual dividend of $1.20 per share and has a dividend yield of 4.3%. Banco Bradesco pays an annual dividend of $0.03 per share and has a dividend yield of 1.2%. Citizens & Northern pays out 81.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Banco Bradesco pays out 6.5% of its earnings in the form of a dividend.

Profitability

This table compares Citizens & Northern and Banco Bradesco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citizens & Northern	13.28%	9.54%	1.04%
Banco Bradesco	12.58%	15.06%	1.14%

Earnings and Valuation

This table compares Citizens & Northern and Banco Bradesco”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens & Northern	$170.03 million	2.94	$23.43 million	$1.48	18.86
Banco Bradesco	$41.79 billion	0.64	$4.24 billion	$0.46	5.53

Banco Bradesco has higher revenue and earnings than Citizens & Northern. Banco Bradesco is trading at a lower price-to-earnings ratio than Citizens & Northern, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Citizens & Northern and Banco Bradesco, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens & Northern	0	2	1	0	2.33
Banco Bradesco	0	6	1	0	2.14

Citizens & Northern currently has a consensus target price of $23.50, suggesting a potential downside of 15.83%. Banco Bradesco has a consensus target price of $4.05, suggesting a potential upside of 59.14%. Given Banco Bradesco’s higher possible upside, analysts clearly believe Banco Bradesco is more favorable than Citizens & Northern.

Insider and Institutional Ownership

30.8% of Citizens & Northern shares are held by institutional investors. 4.7% of Citizens & Northern shares are held by company insiders. Comparatively, 0.3% of Banco Bradesco shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Citizens & Northern beats Banco Bradesco on 8 of the 15 factors compared between the two stocks.

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.

About Banco Bradesco

Banco Bradesco S.A., together with its subsidiaries, provides various banking products and services to individuals, corporates, and businesses in Brazil and internationally. The company operates through two segments, Banking and Insurance. It provides current, savings, click, and salary accounts; real estate credit, vehicle financing, payroll loans, mortgage loans, microcredit, leasing, and personal and installment credit; overdraft and agribusiness loans; debit and business cards; financial and security services; consortium products; car, personal accident, dental, travel, and life insurance; investment products; pension products; foreign currency exchange services; capitalization bonds; and internet banking services. Banco Bradesco S.A. was founded in 1943 and is headquartered in Osasco, Brazil.