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

Dividends

Southern Michigan Bancorp pays an annual dividend of $0.92 per share and has a dividend yield of 2.4%. C&F Financial pays an annual dividend of $1.52 per share and has a dividend yield of 3.1%. C&F Financial has increased its dividend for 8 consecutive years. C&F Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings for Southern Michigan Bancorp and C&F Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Southern Michigan Bancorp 0 0 0 0 N/A
C&F Financial 0 0 0 0 N/A

Volatility & Risk

Southern Michigan Bancorp has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, C&F Financial has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500.

Insider and Institutional Ownership

35.5% of C&F Financial shares are held by institutional investors. 6.0% of C&F Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Southern Michigan Bancorp 21.76% 10.92% 1.11%
C&F Financial 14.85% 12.29% 1.24%

Earnings & Valuation

This table compares Southern Michigan Bancorp and C&F Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Southern Michigan Bancorp $36.24 million 2.50 $8.13 million N/A N/A
C&F Financial $127.02 million 1.31 $18.86 million N/A N/A

C&F Financial has higher revenue and earnings than Southern Michigan Bancorp.

Summary

C&F Financial beats Southern Michigan Bancorp on 9 of the 12 factors compared between the two stocks.

About Southern Michigan Bancorp

Southern Michigan Bancorp, Inc. operates as the bank holding company for Southern Michigan Bank & Trust that provides a range of commercial banking services to individuals, businesses, institutions, and governmental agencies primarily in the southern Michigan communities. Its deposit products include interest and non-interest checking, passbook savings, and various types of money market accounts; time, savings, and demand deposits; and certificates of deposit. The company also provides home mortgages, equity loans, and personal loans; business loans, such as lines of credit, term loans, commercial real estate loans, agriculture loans, letters of credit, small business administration loans, and capital access loans; industrial, construction, real estate, and inventory loans; and consumer lending products comprising direct and indirect loans to purchasers of residential real property and consumer goods. In addition, it offers trust and investment services that include investment management, trustee, individual retirement account rollovers and retirement plan, institutional and personal custody, estate settlement, wealth management, estate and wealth transfer planning assistance, charitable gift planning assistance, and cash management custody services; and safe deposit box and automated teller machine services. Further, the company provides online and mobile banking, bill pay, e-statements, health savings account, business succession planning, life insurance, and remote deposit capture services, as well as payroll, prepaid, gift, and credit cards. It operates through a network of 14 banking offices located in Battle Creek, Camden, Centreville, Coldwater, Constantine, Hillsdale, Marshall, Mendon, Portage, Tekonsha, Three Rivers, and Union City, Michigan. The company was founded in 1871 and is based in Coldwater, Michigan.

About C&F Financial

C&F Financial Corporation operates as a bank holding company for Citizens and Farmers Bank that provides banking services to individuals and businesses. The company's Retail Banking offers various banking services, including checking and savings deposit accounts, as well as business, real estate, development, mortgage, home equity, and installment loans. It also provides ATMs, Internet and mobile banking, and debit and credit cards, as well as safe deposit box rentals, notary public, electronic transfer, and other customary bank services. This segment offers its services through its main office in West Point, Virginia, as well as through 25 Virginia branches located 1 each in Cartersville, Charlottesville, Chester, Cumberland, Hampton, Mechanicsville, Newport News, Norge, Powhatan, Providence Forge, Quinton, Saluda, Sandston, West Point, and Yorktown; 2 in Williamsburg; 4 in Richmond; and 4 in Midlothian. The company's Mortgage Banking segment provides various residential mortgage loans; originates conventional mortgage loans, mortgage loans insured by the Federal Housing Administration, and mortgage loans guaranteed by the United States Department of Agriculture and the Veterans Administration; and ancillary mortgage loan origination services for residential appraisals, as well as various mortgage origination functions to third parties. It provides mortgage loan origination services through 11 offices in Virginia, 2 offices in Maryland, and 2 offices in North Carolina, as well as through 1 each in South Carolina and West Virginia. The company's Consumer Finance segment provides automobile loans through its offices in Richmond and Hampton, Virginia; and Nashville, Tennessee. Its Other segment offers brokerage and wealth management services; and insurance products. The company also provides title and settlement agency, and insurance services. C&F Financial Corporation was founded in 1927 and is headquartered in West Point, Virginia.

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