Head-To-Head Contrast: Arrow Financial (NASDAQ:AROW) and CNB Financial (NASDAQ:CCNE)

CNB Financial (NASDAQ:CCNE) and Arrow Financial (NASDAQ:AROW) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, valuation, risk, earnings, institutional ownership and dividends.

Profitability

This table compares CNB Financial and Arrow Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CNB Financial	19.37%	13.02%	1.26%
Arrow Financial	20.56%	12.25%	1.17%

Analyst Ratings

This is a breakdown of recent ratings and price targets for CNB Financial and Arrow Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNB Financial	0	2	2	1	2.80
Arrow Financial	0	3	2	0	2.40

CNB Financial presently has a consensus price target of $36.00, indicating a potential upside of 0.85%. Arrow Financial has a consensus price target of $40.83, indicating a potential upside of 1.83%. Given Arrow Financial’s higher probable upside, analysts plainly believe Arrow Financial is more favorable than CNB Financial.

Risk & Volatility

CNB Financial has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Arrow Financial has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Insider & Institutional Ownership

52.3% of CNB Financial shares are owned by institutional investors. Comparatively, 46.7% of Arrow Financial shares are owned by institutional investors. 2.9% of CNB Financial shares are owned by insiders. Comparatively, 3.5% of Arrow Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

CNB Financial pays an annual dividend of $0.76 per share and has a dividend yield of 2.1%. Arrow Financial pays an annual dividend of $1.20 per share and has a dividend yield of 3.0%. CNB Financial pays out 24.4% of its earnings in the form of a dividend. Arrow Financial pays out 38.7% 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. CNB Financial has raised its dividend for 1 consecutive years and Arrow Financial has raised its dividend for 7 consecutive years. Arrow Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares CNB Financial and Arrow Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CNB Financial	$432.51 million	2.44	$66.13 million	$3.11	11.48
Arrow Financial	$242.58 million	2.73	$43.95 million	$3.10	12.94

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

Summary

CNB Financial beats Arrow Financial on 9 of the 17 factors compared between the two stocks.

About CNB Financial

CNB Financial Corporation operates as the bank holding company for CNB Bank that provides a range of banking products and services for individual, business, governmental, and institutional customers. The company accepts checking, savings, and time deposit accounts; and offers real estate, commercial, industrial, residential, and consumer loans, as well as various other specialized financial services. It also provides private banking; and wealth and asset management services, including the administration of trusts and estates, retirement plans, and other employee benefit plans, as well as a range of wealth management services. In addition, the company invests in debt and equity securities; sells nonproprietary annuities and other insurance products; and offers small balance unsecured loans and secured loans primarily collateralized by automobiles and equipment, as well as engages in consumer discount loan and finance business. The company was founded in 1865 and is headquartered in Clearfield, Pennsylvania.

About Arrow Financial

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and enhancement to commercial properties, as well as commercial construction and land development loans to finance projects. The company’s lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program. Further, the company provides retirement planning, trust, and estate administration services for individuals, as well as pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. It operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.