CF Bankshares (NASDAQ:CFBK) versus American Bank (OTCMKTS:AMBK) Critical Analysis

CF Bankshares (NASDAQ:CFBK) and American Bank (OTCMKTS:AMBK) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.

Dividends

CF Bankshares pays an annual dividend of $0.36 per share and has a dividend yield of 1.2%. American Bank pays an annual dividend of $0.64 per share and has a dividend yield of 3.5%. CF Bankshares pays out 13.4% of its earnings in the form of a dividend. American Bank pays out 27.5% 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. CF Bankshares has raised its dividend for 4 consecutive years.

Insider & Institutional Ownership

41.1% of CF Bankshares shares are held by institutional investors. 21.0% of CF Bankshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for CF Bankshares and American Bank, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CF Bankshares	0	1	2	0	2.67
American Bank	0	0	0	0	0.00

CF Bankshares presently has a consensus price target of $34.00, indicating a potential upside of 15.61%. Given CF Bankshares’ stronger consensus rating and higher probable upside, analysts clearly believe CF Bankshares is more favorable than American Bank.

Risk & Volatility

CF Bankshares has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, American Bank has a beta of -0.02, suggesting that its stock price is 102% less volatile than the S&P 500.

Profitability

This table compares CF Bankshares and American Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CF Bankshares	13.82%	9.76%	0.82%
American Bank	24.26%	N/A	N/A

Earnings and Valuation

This table compares CF Bankshares and American Bank”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CF Bankshares	$125.92 million	1.50	$17.54 million	$2.69	10.93
American Bank	$59.94 million	1.99	$13.54 million	$2.33	7.79

CF Bankshares has higher revenue and earnings than American Bank. American Bank is trading at a lower price-to-earnings ratio than CF Bankshares, indicating that it is currently the more affordable of the two stocks.

Summary

CF Bankshares beats American Bank on 14 of the 17 factors compared between the two stocks.

About CF Bankshares

CF Bankshares Inc. operates as the bank holding company for CFBank, National Association that provides various banking products and services in the United States. The company accepts savings, retail and business checking accounts, and money market accounts, as well as certificates of deposit. It offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans and equipment leases; residential real estate loans and treasury management depository services; retail banking services and products. In addition, the company offers consumer loans, such as home equity lines of credit, home improvement loans, and loans secured by deposits and purchased loans, as well as other loans. Further, it provides online internet banking, mobile banking, and remote deposits. The company was formerly known as Central Federal Corporation and changed its name to CF Bankshares Inc. in July 2020. CF Bankshares Inc. was founded in 1892 and is based in Columbus, Ohio.

About American Bank

American Bank Incorporated operates as the bank holding company for American Bank that provides various banking products and services to consumer, business, institutional, and governmental customers. It accepts a range of interest-bearing checking and money market accounts, savings accounts, certificates of deposit, and individual retirement accounts. The company also offers commercial, industrial, and other loans; commercial mortgage loans; commercial construction loans; residential mortgage loans; and consumer loans, including personal term loans, personal credit lines, automobile loans, home equity loans, and home equity lines of credit and loans. In addition, it provides online or mobile banking, automated teller machine, safe deposit box rental, and wire transfer services, as well as sells checks and checkbooks, and purchases investment securities. The company operates an office located in Allentown, Pennsylvania; and a loan production office in Blue Bell, Pennsylvania. The company was founded in 1997 and is based in Allentown, Pennsylvania.