Contrasting CB Financial Services (NASDAQ:CBFV) & Bankwell Financial Group (NASDAQ:BWFG)

CB Financial Services (NASDAQ:CBFV) and Bankwell Financial Group (NASDAQ:BWFG) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Institutional & Insider Ownership

33.1% of CB Financial Services shares are held by institutional investors. Comparatively, 35.8% of Bankwell Financial Group shares are held by institutional investors. 9.4% of CB Financial Services shares are held by insiders. Comparatively, 19.2% of Bankwell Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares CB Financial Services and Bankwell Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CB Financial Services	25.36%	9.12%	0.81%
Bankwell Financial Group	15.28%	11.55%	0.93%

Dividends

CB Financial Services pays an annual dividend of $1.00 per share and has a dividend yield of 4.4%. Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 3.3%. CB Financial Services pays out 22.7% of its earnings in the form of a dividend. Bankwell Financial Group pays out 20.8% 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.

Earnings & Valuation

This table compares CB Financial Services and Bankwell Financial Group’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CB Financial Services	$86.24 million	1.35	$22.55 million	$4.40	5.15
Bankwell Financial Group	$94.31 million	2.02	$36.66 million	$3.84	6.28

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

Analyst Recommendations

This is a summary of current ratings and target prices for CB Financial Services and Bankwell Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CB Financial Services	0	3	0	0	2.00
Bankwell Financial Group	0	0	1	0	3.00

CB Financial Services presently has a consensus price target of $24.33, suggesting a potential upside of 7.48%. Bankwell Financial Group has a consensus price target of $34.00, suggesting a potential upside of 41.02%. Given Bankwell Financial Group’s stronger consensus rating and higher possible upside, analysts clearly believe Bankwell Financial Group is more favorable than CB Financial Services.

Risk and Volatility

CB Financial Services has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Summary

Bankwell Financial Group beats CB Financial Services on 13 of the 16 factors compared between the two stocks.

About CB Financial Services

CB Financial Services, Inc. operates as the bank holding company for Community Bank that provides various banking products and services for individuals and businesses in southwestern Pennsylvania, West Virginia, and Ohio. The company's primary deposit products include demand deposits, NOW accounts, money market accounts, and savings accounts, as well as time deposit products. Its loan products comprise residential real estate loans, such as one- to four-family mortgage loans, home equity installment loans, and home equity lines of credit; commercial real estate loans that are secured primarily by improved properties, such as retail facilities, office buildings, and other non-residential buildings; construction loans to individuals to finance the construction of residential dwellings, as well as for the construction of commercial properties, including hotels, apartment buildings, housing developments, and owner-occupied properties used for businesses; commercial and industrial loans, and lines of credit; consumer loans consisting of indirect auto loans, secured and unsecured loans, and lines of credit; and other loans. In addition, the company conducts insurance agency activities by offering property and casualty, commercial liability, surety, and other insurance products. The company was founded in 1901 and is headquartered in Carmichaels, Pennsylvania.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.