Critical Review: Chemung Financial (NASDAQ:CHMG) versus South Atlantic Bancshares (OTCMKTS:SABK)

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

Risk & Volatility

Chemung Financial has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500. Comparatively, South Atlantic Bancshares has a beta of 0.08, suggesting that its share price is 92% less volatile than the S&P 500.

Valuation & Earnings

This table compares Chemung Financial and South Atlantic Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chemung Financial	$140.78 million	2.00	$15.10 million	$3.14	18.58
South Atlantic Bancshares	$102.25 million	1.68	$15.94 million	$2.10	10.79

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

Profitability

This table compares Chemung Financial and South Atlantic Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chemung Financial	10.73%	11.58%	1.01%
South Atlantic Bancshares	N/A	N/A	N/A

Insider and Institutional Ownership

47.5% of Chemung Financial shares are owned by institutional investors. Comparatively, 13.3% of South Atlantic Bancshares shares are owned by institutional investors. 12.4% of Chemung Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Chemung Financial and South Atlantic Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chemung Financial	0	4	0	0	2.00
South Atlantic Bancshares	0	1	0	0	2.00

Chemung Financial presently has a consensus target price of $57.00, indicating a potential downside of 2.31%. Given Chemung Financial’s higher possible upside, equities research analysts clearly believe Chemung Financial is more favorable than South Atlantic Bancshares.

Dividends

Chemung Financial pays an annual dividend of $1.36 per share and has a dividend yield of 2.3%. South Atlantic Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Chemung Financial pays out 43.3% of its earnings in the form of a dividend. South Atlantic Bancshares pays out 4.8% 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 increased 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.

Summary

Chemung Financial beats South Atlantic Bancshares on 13 of the 15 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 South Atlantic Bancshares

South Atlantic Bancshares, Inc. operates as the bank holding company for South Atlantic Bank that provides consumer and commercial banking products and services to individuals, small businesses, and corporations in South Carolina. The company offers checking, money market, and saving accounts, as well as certificate of deposit, individual retirement, and health saving accounts; personal, auto, and recreation loans, as well as home equity and ready reserve overdraft line of credits, and commercial lending products; and credit cards. It also provides cash management and merchant card services; remote deposit capture and automated clearing house services; online, mobile, and telephone banking services; personal and business checks; mortgage products and services; and wealth management services. The company operates offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, and Beaufort, South Carolina. South Atlantic Bancshares, Inc. was founded in 2007 and is headquartered in Myrtle Beach, South Carolina.