Chester Bancorp (OTCMKTS:CNBA) versus First Merchants (NASDAQ:FRME) Head-To-Head Review

Chester Bancorp (OTCMKTS:CNBA) and First Merchants (NASDAQ:FRME) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.

Profitability

This table compares Chester Bancorp and First Merchants’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chester Bancorp	N/A	N/A	N/A
First Merchants	18.87%	9.58%	1.21%

Analyst Recommendations

This is a summary of current ratings for Chester Bancorp and First Merchants, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chester Bancorp	0	0	0	0	0.00
First Merchants	0	4	2	0	2.33

First Merchants has a consensus target price of $48.33, suggesting a potential upside of 20.50%. Given First Merchants’ stronger consensus rating and higher possible upside, analysts plainly believe First Merchants is more favorable than Chester Bancorp.

Insider & Institutional Ownership

73.9% of First Merchants shares are held by institutional investors. 38.8% of Chester Bancorp shares are held by insiders. Comparatively, 1.8% of First Merchants shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Chester Bancorp has a beta of -0.51, suggesting that its share price is 151% less volatile than the S&P 500. Comparatively, First Merchants has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Valuation and Earnings

This table compares Chester Bancorp and First Merchants”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chester Bancorp	N/A	N/A	N/A	N/A	N/A
First Merchants	$1.05 billion	2.40	$226.00 million	$3.40	11.80

First Merchants has higher revenue and earnings than Chester Bancorp.

Dividends

Chester Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 12.8%. First Merchants pays an annual dividend of $1.44 per share and has a dividend yield of 3.6%. First Merchants pays out 42.4% of its earnings in the form of a dividend. First Merchants has increased its dividend for 13 consecutive years.

Summary

First Merchants beats Chester Bancorp on 10 of the 13 factors compared between the two stocks.

About Chester Bancorp

Chester Bancorp, Inc. operates as the holding company for Chester National Bank that provides various banking products and services to individuals and businesses in Chester, Illinois. It offers checking accounts, such as regular checking, student checking, golden checking, and club checking accounts; savings accounts, including statement savings, Christmas club, and money market accounts; and certificate of deposits and individual retirement accounts. The company also provides loans comprising mortgage, construction, lot, home equity, consumer, and business loans; and reorder check services. It operates two full service offices in Sparta, Illinois; and Perryville, Missouri. Chester Bancorp, Inc. was founded in 1996 and is based in Chester, Illinois.

About First Merchants

First Merchants Corporation operates as the financial holding company for First Merchants Bank that provides community banking services. The company offers a range of financial services, including time, savings, and demand deposits; and consumer, commercial, agri-business, public finance, and real estate mortgage loans. It also provides personal and corporate trust; brokerage and private wealth management; and letters of credit, repurchase agreements, and other corporate services. The company operates banking locations in Indiana, Illinois, Ohio, and Michigan counties. It also offers its services through electronic and mobile delivery channels. First Merchants Corporation was founded in 1893 and is headquartered in Muncie, Indiana.