Eagle Financial Services (NASDAQ:EFSI) and CF Bankshares (NASDAQ:CFBK) Critical Analysis

CF Bankshares (NASDAQ:CFBK) and Eagle Financial Services (NASDAQ:EFSI) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, profitability, earnings, dividends, institutional ownership, analyst recommendations and risk.

Analyst Ratings

This is a breakdown of current ratings and target prices for CF Bankshares and Eagle Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CF Bankshares	0	0	2	0	3.00
Eagle Financial Services	0	3	2	1	2.67

CF Bankshares currently has a consensus target price of $40.00, indicating a potential upside of 13.52%. Eagle Financial Services has a consensus target price of $43.75, indicating a potential downside of 4.70%. Given CF Bankshares’ stronger consensus rating and higher probable upside, equities research analysts clearly believe CF Bankshares is more favorable than Eagle Financial Services.

Risk & Volatility

CF Bankshares has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, Eagle Financial Services has a beta of 0.21, indicating that its stock price is 79% less volatile than the S&P 500.

Dividends

CF Bankshares pays an annual dividend of $0.36 per share and has a dividend yield of 1.0%. Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 2.7%. CF Bankshares pays out 10.4% of its earnings in the form of a dividend. Eagle Financial Services pays out 37.6% 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. CF Bankshares has increased its dividend for 4 consecutive years and Eagle Financial Services has increased its dividend for 14 consecutive years. Eagle Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares CF Bankshares and Eagle Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CF Bankshares	18.08%	11.76%	1.04%
Eagle Financial Services	14.55%	7.98%	0.82%

Insider and Institutional Ownership

41.1% of CF Bankshares shares are owned by institutional investors. Comparatively, 0.3% of Eagle Financial Services shares are owned by institutional investors. 17.7% of CF Bankshares shares are owned by insiders. Comparatively, 7.1% of Eagle Financial Services shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares CF Bankshares and Eagle Financial Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CF Bankshares	$125.92 million	1.87	$17.54 million	$3.46	10.18
Eagle Financial Services	$105.89 million	2.35	$8.21 million	$3.30	13.91

CF Bankshares has higher revenue and earnings than Eagle Financial Services. CF Bankshares is trading at a lower price-to-earnings ratio than Eagle Financial Services, indicating that it is currently the more affordable of the two stocks.

Summary

CF Bankshares beats Eagle Financial Services on 12 of the 17 factors compared between the two stocks.

About CF Bankshares

CF Bankshares Inc. is the bank holding company for CFBank, a community-focused financial institution headquartered in Columbus, Ohio. CFBank provides banking services to individuals, families, businesses and professional clients through its branch network and digital banking channels. The bank’s offerings include checking and savings accounts, certificates of deposit, residential mortgages, home equity financing, consumer loans and commercial lending. It also provides business banking services such as commercial real estate and construction loans, treasury management, deposit services and other financing solutions for small and middle-market businesses.

About Eagle Financial Services

Eagle Financial Services, Inc. is a bank holding company whose principal subsidiary is the Bank of Clarke County. The bank traces its history to 1881 and provides community banking services to individuals, families and businesses. Its offerings include deposit accounts, personal and commercial loans, mortgages, and online and mobile banking services. The company serves communities in Northern Virginia and the Shenandoah Valley, including areas around Clarke and Frederick counties.