Head to Head Comparison: City (NASDAQ:CHCO) & Chemung Financial (NASDAQ:CHMG)

City (NASDAQ:CHCO) and Chemung Financial (NASDAQ:CHMG) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, risk, valuation, earnings, profitability and institutional ownership.

Volatility and Risk

City has a beta of 0.49, indicating that its stock price is 51% less volatile than the S&P 500. Comparatively, Chemung Financial has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Profitability

This table compares City and Chemung Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
City	32.72%	16.58%	1.96%
Chemung Financial	12.77%	12.45%	1.13%

Insider and Institutional Ownership

72.4% of City shares are held by institutional investors. Comparatively, 47.5% of Chemung Financial shares are held by institutional investors. 1.8% of City shares are held by insiders. Comparatively, 12.7% of Chemung Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

City pays an annual dividend of $3.48 per share and has a dividend yield of 2.7%. Chemung Financial pays an annual dividend of $1.36 per share and has a dividend yield of 1.8%. City pays out 38.3% of its earnings in the form of a dividend. Chemung Financial pays out 35.9% 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. City has raised its dividend for 6 consecutive years and Chemung Financial has raised its dividend for 1 consecutive years. City is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares City and Chemung Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
City	$398.98 million	4.64	$130.49 million	$9.08	14.46
Chemung Financial	$140.78 million	2.55	$15.10 million	$3.79	19.63

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

Analyst Recommendations

This is a breakdown of current ratings for City and Chemung Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
City	0	5	1	0	2.17
Chemung Financial	0	2	1	0	2.33

City presently has a consensus target price of $134.25, indicating a potential upside of 2.24%. Chemung Financial has a consensus target price of $64.00, indicating a potential downside of 13.98%. Given City’s higher possible upside, analysts plainly believe City is more favorable than Chemung Financial.

Summary

City beats Chemung Financial on 11 of the 16 factors compared between the two stocks.

About City

City Holding Company operates as a holding company for City National Bank of West Virginia that provides various banking, trust, and investment management, and other financial solutions in the United States. The company offers checking, savings, and money market accounts, as well as certificates of deposit and individual retirement accounts. It also provides commercial and industrial loans that consist of loans to corporate and other legal entity borrowers primarily in small to mid-size industrial and commercial companies; commercial real estate loans comprising commercial mortgages, which are secured by nonresidential and multi-family residential properties; residential real estate loans to consumers for the purchase or refinance of residence; first-priority home equity loans; home equity lines of credit; amortized home equity loans; consumer loans that are secured and unsecured by automobiles, boats, recreational vehicles, certificates of deposit, and other personal property; and demand deposit account overdrafts, as well as owner-occupied real estate and construction, land development, and lines of credit. In addition, the company offers mortgage banking services, including fixed and adjustable-rate mortgages, construction financing, land loans, production of conventional and government-insured mortgages, secondary marketing, and mortgage servicing. Further, it provides deposit services for commercial customers comprising treasury management, lockbox, and other cash management services; merchant credit card services; wealth management, trust, investment, and custodial services for commercial and individual customers; and corporate trust and institutional custody, financial and estate planning, and retirement plan services, as well as automated-teller-machine, interactive-teller-machine, mobile banking, interactive voice response systems, and credit and debit card services. City Holding Company was founded in 1957 and is headquartered in Charleston, West Virginia.

About Chemung Financial

Chemung Financial Corporation operates as a bank holding company for Chemung Canal Trust Company that provides a range of banking, financing, fiduciary, and other financial services. The company provides demand, savings, and time deposits; non-interest and interest-bearing checking accounts; and insured money market accounts. It also offers commercial and agricultural loans comprising loans to small to mid-sized businesses; commercial and residential mortgage loans; and consumer loans, including home equity lines of credit and home equity term loans. In addition, the company provides interest rate swaps, letters of credit, employee benefit plans, insurance products, mutual fund, brokerage, and tax preparation services. Further, it offers guardian, custodian, trustee, investment, pension, estate planning, and employee benefit administrative services, as well as acts as an agent for pension, profit-sharing, and other employee benefit trusts. Chemung Financial Corporation was founded in 1833 and is headquartered in Elmira, New York.