Critical Comparison: First United (NASDAQ:FUNC) & Citizens Community Bancorp (NASDAQ:CZWI)

First United (NASDAQ:FUNC) and Citizens Community Bancorp (NASDAQ:CZWI) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Institutional and Insider Ownership

33.3% of First United shares are held by institutional investors. Comparatively, 55.1% of Citizens Community Bancorp shares are held by institutional investors. 8.1% of First United shares are held by company insiders. Comparatively, 4.1% of Citizens Community Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares First United and Citizens Community Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First United	$121.42 million	2.31	$24.51 million	$3.86	11.25
Citizens Community Bancorp	$98.77 million	2.09	$14.42 million	$1.31	16.31

First United has higher revenue and earnings than Citizens Community Bancorp. First United is trading at a lower price-to-earnings ratio than Citizens Community Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for First United and Citizens Community Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First United	0	0	3	0	3.00
Citizens Community Bancorp	0	4	1	0	2.20

First United presently has a consensus target price of $49.50, suggesting a potential upside of 13.95%. Citizens Community Bancorp has a consensus target price of $23.50, suggesting a potential upside of 10.02%. Given First United’s stronger consensus rating and higher probable upside, research analysts plainly believe First United is more favorable than Citizens Community Bancorp.

Profitability

This table compares First United and Citizens Community Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First United	20.05%	13.69%	1.36%
Citizens Community Bancorp	12.94%	6.77%	0.72%

Volatility and Risk

First United has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Citizens Community Bancorp has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500.

Dividends

First United pays an annual dividend of $1.04 per share and has a dividend yield of 2.4%. Citizens Community Bancorp pays an annual dividend of $0.42 per share and has a dividend yield of 2.0%. First United pays out 26.9% of its earnings in the form of a dividend. Citizens Community Bancorp pays out 32.1% 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. First United has raised its dividend for 6 consecutive years and Citizens Community Bancorp has raised its dividend for 6 consecutive years. First United is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

First United beats Citizens Community Bancorp on 14 of the 16 factors compared between the two stocks.

About First United

First United Corporation operates as the bank holding company for First United Bank & Trust that provides various retail and commercial banking services to businesses and individuals. It offers various deposit products, which includes checking, savings, money market deposit, and regular and individual retirement accounts (IRAs), as well as certificates of deposit. The company loan portfolio includes commercial loans secured by real estate, commercial equipment, vehicles, or other assets of the borrower; commercial real estate loans for residential and commercial development, agricultural purpose properties, and service industry buildings, such as restaurants and motels, retail buildings, and general purpose business space; residential mortgage loans; home equity lines of credit; residential real estate construction loans; and indirect and direct auto loans, student loans, and other secured and unsecured lines of credit and term loans. It also offers access to multi-million-dollar certificates of deposit and the Intrafi cash service, including multi-million-dollar savings and demand deposits to municipalities, businesses, and consumers; and treasury management, cash sweep, and various checking services. In addition, the company provides trust services, which includes personal trust, investment agency accounts, charitable trusts, retirement accounts, including IRA roll-overs, 401(k) accounts and defined benefit plans, estate administration, and estate planning; and insurance products, brokerage services, and safe deposit and night depository facilities. First United Corporation was founded in 1900 and is headquartered in Oakland, Maryland.

About Citizens Community Bancorp

Citizens Community Bancorp, Inc. operates as a bank holding company for Citizens Community Federal N.A. that provides various traditional community banking services to businesses, agricultural operators, and consumers. It accepts various deposit products, including demand deposits, savings and money market accounts, and certificates of deposit. The company also offers various loan products, such as commercial real estate, commercial and industrial, agricultural real estate, agricultural operating, and consumer loans; and one-to-four family residential mortgages and home equity lines-of-credit. In addition, it maintains a portfolio of investments comprising mortgage-backed, corporate asset-backed, U.S. Government sponsored agency, and corporate debt securities. Citizens Community Bancorp, Inc. was founded in 1938 and is based in Eau Claire, Wisconsin.