Analyzing Madison County Financial (OTCMKTS:MCBK) & Chemung Financial (NASDAQ:CHMG)

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

Institutional and Insider Ownership

47.5% of Chemung Financial shares are owned by institutional investors. 12.4% of Chemung Financial shares are owned by insiders. Comparatively, 16.9% of Madison County Financial shares are owned by 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.

Valuation and Earnings

This table compares Chemung Financial and Madison County Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chemung Financial	$84.69 million	2.87	$23.67 million	$2.77	18.34
Madison County Financial	$29.54 million	2.44	$3.82 million	$1.03	26.21

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Chemung Financial	9.58%	11.52%	0.93%
Madison County Financial	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent ratings and price targets for Chemung Financial and Madison County Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chemung Financial	0	4	0	0	2.00
Madison County Financial	0	0	0	0	0.00

Chemung Financial presently has a consensus target price of $54.50, suggesting a potential upside of 7.30%. Given Chemung Financial’s stronger consensus rating and higher possible upside, equities analysts clearly believe Chemung Financial is more favorable than Madison County Financial.

Dividends

Chemung Financial pays an annual dividend of $1.36 per share and has a dividend yield of 2.7%. Madison County Financial pays an annual dividend of $0.36 per share and has a dividend yield of 1.3%. Chemung Financial pays out 49.1% of its earnings in the form of a dividend. Madison County Financial pays out 35.0% 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. Chemung Financial has raised its dividend for 1 consecutive years. Chemung Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Chemung Financial has a beta of 0.44, suggesting that its share price is 56% less volatile than the S&P 500. Comparatively, Madison County Financial has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500.

Summary

Chemung Financial beats Madison County Financial on 13 of the 16 factors compared between the two stocks.

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.

About Madison County Financial

Madison County Financial, Inc. operates as the holding company for Madison County Bank that provides banking and financial services to individual and corporate customers in Nebraska, the United States. It offers checking, money market savings, savings, and individual retirement accounts; certificates of deposit; credit and debit cards; home loans; and consumer loans, including home equity lines of credit, second mortgage, home improvement, recreational vehicle, personal, and overdraft protection loans, as well as loans for automobiles, trucks, and vans. The company also provides agricultural real estate, machinery and equipment, livestock and crop, and operating loans; and commercial real estate, construction, investment property, and working capital loans, as well as equipment financing services. In addition, it offers online and mobile banking, and merchant services. The company was formerly known as Madison County Holding Company and changed its name to Madison County Financial, Inc. in October 2012. Madison County Financial, Inc. was founded in 1888 and is headquartered in Madison, Nebraska.