Contrasting Chemung Financial (NASDAQ:CHMG) and Eagle Financial Services (NASDAQ:EFSI)

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

Earnings and Valuation

This table compares Eagle Financial Services and Chemung Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Financial Services	$105.89 million	2.07	$8.21 million	$3.52	11.50
Chemung Financial	$140.78 million	2.54	$15.10 million	$3.79	19.54

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

Institutional and Insider Ownership

0.3% of Eagle Financial Services shares are held by institutional investors. Comparatively, 47.5% of Chemung Financial shares are held by institutional investors. 7.1% of Eagle Financial Services shares are held by company insiders. Comparatively, 12.7% of Chemung Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Eagle Financial Services has a beta of 0.22, meaning that its stock price is 78% less volatile than the S&P 500. Comparatively, Chemung Financial has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Eagle Financial Services	15.81%	10.17%	0.98%
Chemung Financial	12.77%	12.45%	1.13%

Analyst Ratings

This is a breakdown of current recommendations for Eagle Financial Services and Chemung Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Financial Services	1	1	2	1	2.60
Chemung Financial	0	2	1	0	2.33

Eagle Financial Services presently has a consensus target price of $42.25, indicating a potential upside of 4.37%. Chemung Financial has a consensus target price of $64.00, indicating a potential downside of 13.58%. Given Eagle Financial Services’ stronger consensus rating and higher probable upside, analysts plainly believe Eagle Financial Services is more favorable than Chemung Financial.

Dividends

Eagle Financial Services pays an annual dividend of $1.24 per share and has a dividend yield of 3.1%. Chemung Financial pays an annual dividend of $1.36 per share and has a dividend yield of 1.8%. Eagle Financial Services pays out 35.2% 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. Eagle Financial Services has raised its dividend for 14 consecutive years and Chemung Financial has raised its dividend for 1 consecutive years. Eagle Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Chemung Financial beats Eagle Financial Services on 10 of the 18 factors compared between the two stocks.

About Eagle Financial Services

Eagle Financial Services, Inc. operates as the bank holding company for Bank of Clarke County that provides various retail and commercial banking products and services in the Shenandoah Valley and Northern Virginia. The company’s deposit products include checking, NOW, money market, and regular savings accounts; and demand and time deposits. Its loan portfolio comprises one-to-four-family residential real estate, commercial real estate, construction and land development, and commercial and industrial loans, as well as secured and unsecured consumer loans, which include personal installment loans, personal lines of credit, automobile loans, and credit card loans. The company also offers personal and retirement plan services; investment services comprising tax-deferred annuities, IRAs and rollovers, mutual funds, retirement plans, college savings plans, life insurance, long term care insurance, fixed income investing, brokerage CDs, and full service or discount brokerage services; non-deposit investment products; and title insurance products. In addition, it provides ATM and debit cards; and telephone, internet, and mobile banking services, as well as other commercial deposit account services, such as ACH origination and remote deposit capture services. The company operates through twelve full-service branches, two loan production offices, one wealth management office, and one drive-through only facility, as well as 13 ATM locations in the Virginia communities of Berryville, Winchester, Boyce, Stephens City, Purcellville, Warrenton, Leesburg, Ashburn, and Fairfax. Eagle Financial Services, Inc. was founded in 1881 and is headquartered in Berryville, 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.