Critical Contrast: Community Bancorp (NASDAQ:CMTV) & SmartFinancial (NASDAQ:SMBK)

Community Bancorp (NASDAQ:CMTV) and SmartFinancial (NASDAQ:SMBK) are both small-cap financial services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Insider and Institutional Ownership

58.8% of SmartFinancial shares are held by institutional investors. 6.6% of Community Bancorp shares are held by insiders. Comparatively, 6.9% of SmartFinancial 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Community Bancorp	25.28%	15.98%	1.45%
SmartFinancial	12.67%	7.33%	0.71%

Dividends

Community Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. SmartFinancial pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Community Bancorp pays out 31.5% of its earnings in the form of a dividend. SmartFinancial pays out 11.5% 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. SmartFinancial has increased its dividend for 3 consecutive years.

Valuation & Earnings

This table compares Community Bancorp and SmartFinancial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Bancorp	$47.86 million	4.51	$16.97 million	$3.17	12.18
SmartFinancial	$203.48 million	3.56	$36.14 million	$3.12	13.57

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

Volatility & Risk

Community Bancorp has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, SmartFinancial has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Community Bancorp and SmartFinancial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Bancorp	0	0	1	0	3.00
SmartFinancial	0	3	1	1	2.60

SmartFinancial has a consensus target price of $45.88, indicating a potential upside of 8.36%. Given SmartFinancial’s higher possible upside, analysts plainly believe SmartFinancial is more favorable than Community Bancorp.

Summary

SmartFinancial beats Community Bancorp on 10 of the 17 factors compared between the two stocks.

About Community Bancorp

Community Bancorp. operates as the bank holding company for Community National Bank that provides a range of retail banking services to residents, businesses, nonprofit organizations, and municipalities. It provides various consumer banking products and services, including checking accounts, savings programs, ATMs, debit/credit cards, and night deposit facilities, as well as online, mobile, and telephone banking. The company’s business banking products and services comprise credit products for various business purposes, including financing for commercial business properties, equipment, inventories, and accounts receivable, as well as letters of credit; and business checking and other deposit accounts, cash management services, repurchase agreements, ACH and wire transfer services, and remote deposit capture. It offers commercial real estate lending products for commercial developers and investors, residential builders and developers, and community development entities, which include credit products to facilitate the purchase of land and/or build structures for business, for investors to develop residential or commercial properties, and for real estate secured financing of existing businesses, as well as financing to startups and other small businesses. The company’s residential real estate lending products include fixed-rate and adjustable rate residential mortgage and home equity loans; retail credit products include personal, automobile, and boat/recreational vehicle loans; and municipal and institutional banking products and services for state and local governments, schools, charities, membership, and not-for-profit associations comprise deposit accounts, tax-exempt loans, lines of credit, and term loans, as well as a collateralized secured deposit products. It operates through a main office in Derby; and eleven branch offices in northeastern and central Vermont. Community Bancorp. was founded in 1851 and is headquartered in Derby, Vermont.

About SmartFinancial

SmartFinancial, Inc. operates as the bank holding company for SmartBank that provides various financial services to individuals and corporate customers in Tennessee, Alabama, and Florida. It operates through Commercial Real Estate, Consumer Real Estate, Construction and Land Development, Commercial and Industrial, Leases, and Consumer and Other segments. The company offers noninterest-bearing and interest-bearing checking, interest-bearing demand, savings, money market, time deposit, individual retirement accounts, as well as certificates of deposit. It also provides commercial and residential real estate, consumer real estate, and construction and land development loans; commercial and financial loans and leases; commercial business and mortgage loans; and direct consumer installment, educational, agriculture, and other revolving credit loans; equipment financing, heavy equipment, semis, and trailers loans and leases to small and mid-size companies; letters of credit; and overdraft facilities. In addition, the company offers wealth management, insurance, mortgage origination, and internet and mobile banking services. SmartFinancial, Inc. is headquartered in Knoxville, Tennessee.