Reviewing Touchstone Bankshares (OTCMKTS:TSBA) and Citizens (NASDAQ:CIZN)

Touchstone Bankshares (OTCMKTS:TSBA) and Citizens (NASDAQ:CIZN) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, earnings, risk and institutional ownership.

Institutional & Insider Ownership

0.4% of Touchstone Bankshares shares are held by institutional investors. Comparatively, 9.7% of Citizens shares are held by institutional investors. 10.4% of Touchstone Bankshares shares are held by company insiders. Comparatively, 8.9% of Citizens shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Touchstone Bankshares has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Citizens has a beta of -0.01, meaning that its stock price is 101% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Touchstone Bankshares and Citizens, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Touchstone Bankshares	0	0	0	0	0.00
Citizens	0	0	3	0	3.00

Citizens has a consensus target price of $24.00, suggesting a potential upside of 165.19%. Given Citizens’ stronger consensus rating and higher probable upside, analysts plainly believe Citizens is more favorable than Touchstone Bankshares.

Profitability

This table compares Touchstone Bankshares and Citizens’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Touchstone Bankshares	N/A	N/A	N/A
Citizens	7.00%	11.28%	0.37%

Dividends

Touchstone Bankshares pays an annual dividend of $0.32 per share and has a dividend yield of 2.2%. Citizens pays an annual dividend of $0.08 per share and has a dividend yield of 0.9%. Touchstone Bankshares pays out 49.2% of its earnings in the form of a dividend. Citizens pays out 5.5% 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. Citizens has raised its dividend for 1 consecutive years.

Valuation and Earnings

This table compares Touchstone Bankshares and Citizens”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Touchstone Bankshares	N/A	N/A	$1.61 million	$0.65	21.92
Citizens	$40.95 million	1.26	$5.49 million	$1.45	6.24

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

Summary

Citizens beats Touchstone Bankshares on 12 of the 16 factors compared between the two stocks.

About Touchstone Bankshares

Touchstone Bankshares, Inc. operates as the bank holding company for Touchstone Bank that provides various community banking products and services in the United States. The company offers personal and business savings and checking accounts. It also provides home mortgage, professional mortgage, home equity, auto, and personal term loans; personal lines of credit; and business loans comprising commercial real estate, operating capital, business term, and construction loans, as well as business lines of credit. In addition, the company offers credit and debit cards; and digital banking, treasury, wealth management, and financial planning services. It has branches in northern North Carolina and south-central Virginia. The company was founded in 1906 and is headquartered in Prince George, Virginia.

About Citizens

Citizens Holding Company operates as the bank holding company for The Citizens Bank of Philadelphia that provides various commercial and personal banking products and services. It offers demand deposits; and savings and time deposit accounts. The company also provides secured and unsecured loans; mortgage loans; single and multi-family housing, farm, residential and commercial construction, and commercial real estate loans; commercial, industrial, and agricultural production loans; and consumer loans, as well as issues letters of credit. In addition, it offers personal and corporate trust services; credit life and title insurance; and online and mobile banking services. The company was founded in 1908 and is headquartered in Philadelphia, Mississippi.