Analyzing Community Trust Bancorp (NASDAQ:CTBI) & C&F Financial (NASDAQ:CFFI)

C&F Financial (NASDAQ:CFFI) and Community Trust Bancorp (NASDAQ:CTBI) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for C&F Financial and Community Trust Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
C&F Financial	0	1	0	0	2.00
Community Trust Bancorp	0	2	1	1	2.75

Community Trust Bancorp has a consensus price target of $68.50, suggesting a potential downside of 4.91%. Given Community Trust Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Community Trust Bancorp is more favorable than C&F Financial.

Volatility & Risk

C&F Financial has a beta of 0.32, suggesting that its stock price is 68% less volatile than the S&P 500. Comparatively, Community Trust Bancorp has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500.

Earnings and Valuation

This table compares C&F Financial and Community Trust Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
C&F Financial	$186.13 million	1.40	$26.83 million	$8.70	9.20
Community Trust Bancorp	$409.34 million	3.20	$98.06 million	$5.71	12.62

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

Insider and Institutional Ownership

37.2% of C&F Financial shares are owned by institutional investors. Comparatively, 60.2% of Community Trust Bancorp shares are owned by institutional investors. 6.4% of C&F Financial shares are owned by insiders. Comparatively, 2.6% of Community Trust Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

C&F Financial pays an annual dividend of $1.92 per share and has a dividend yield of 2.4%. Community Trust Bancorp pays an annual dividend of $2.12 per share and has a dividend yield of 2.9%. C&F Financial pays out 22.1% of its earnings in the form of a dividend. Community Trust Bancorp pays out 37.1% 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. C&F Financial has increased its dividend for 1 consecutive years and Community Trust Bancorp has increased its dividend for 44 consecutive years. Community Trust Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares C&F Financial and Community Trust Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
C&F Financial	14.84%	11.03%	1.03%
Community Trust Bancorp	24.85%	12.27%	1.56%

Summary

Community Trust Bancorp beats C&F Financial on 15 of the 18 factors compared between the two stocks.

About C&F Financial

C&F Financial Corp. is a bank holding company, which engages in the provision of banking services to individuals and businesses. It operates through the following segments: Community Banking, Mortgage Banking and Consumer Finance. The Community Banking segment provides checking and savings deposit accounts, business, real estate, development, mortgage, home equity, and installment loans. The Mortgage Banking segment offers ancillary mortgage loan origination services for loan settlement and residential appraisals. The Consumer Finance segment consists of automobile financing through lending programs that are designed to serve customers in the non-prime market who have limited access to traditional automobile financing. The company was founded on March 8, 1994 and is headquartered in Toano, VA.

About Community Trust Bancorp

Community Trust Bancorp, Inc. operates as the bank holding company for Community Trust Bank, Inc. that engages in the provision of commercial and personal banking, and trust and wealth management services to small and mid-sized communities in eastern, northeastern, central, and south-central Kentucky, as well as southern West Virginia, and northeastern Tennessee. The company accepts time and demand deposits, checking accounts, savings accounts and savings certificates, individual retirement accounts and Keogh plans, and money market accounts. Its loan portfolio includes commercial, construction, mortgage, and personal loans; lease-financing, lines of credit, revolving lines of credit, and term loans, as well as other specialized loans, including asset-based financing; residential and commercial real estate loans; and consumer loans. The company also provides cash management, renting safe deposit boxes, and funds transfer services; issues letters of credit; and acts as a trustee of personal trusts, executor of estates, trustee for employee benefit trusts, and paying agent for bond and stock issues, as well as an investment agent and depositor for securities. In addition, it offers securities brokerage services; debit cards; annuity and life insurance products; and repurchase agreements, as well as mobile, internet banking, and e-statement services. The company was founded in 1903 and is headquartered in Pikeville, Kentucky.