ACNB (NASDAQ:ACNB) & Timberland Bancorp (NASDAQ:TSBK) Critical Comparison

Timberland Bancorp (NASDAQ:TSBK) and ACNB (NASDAQ:ACNB) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Institutional and Insider Ownership

65.5% of Timberland Bancorp shares are held by institutional investors. Comparatively, 32.3% of ACNB shares are held by institutional investors. 3.6% of Timberland Bancorp shares are held by insiders. Comparatively, 3.7% of ACNB shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Timberland Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.7%. ACNB pays an annual dividend of $1.68 per share and has a dividend yield of 2.7%. Timberland Bancorp pays out 30.1% of its earnings in the form of a dividend. ACNB pays out 31.9% 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. Timberland Bancorp has increased its dividend for 13 consecutive years and ACNB has increased its dividend for 8 consecutive years.

Risk & Volatility

Timberland Bancorp has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, ACNB has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Timberland Bancorp and ACNB, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timberland Bancorp	0	0	0	1	4.00
ACNB	0	2	2	0	2.50

ACNB has a consensus price target of $64.50, suggesting a potential upside of 3.18%. Given ACNB’s higher possible upside, analysts clearly believe ACNB is more favorable than Timberland Bancorp.

Profitability

This table compares Timberland Bancorp and ACNB’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timberland Bancorp	26.46%	11.72%	1.55%
ACNB	27.15%	13.78%	1.77%

Valuation and Earnings

This table compares Timberland Bancorp and ACNB”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Timberland Bancorp	$114.63 million	3.05	$29.16 million	$3.99	11.28
ACNB	$161.34 million	3.94	$37.05 million	$5.27	11.86

ACNB has higher revenue and earnings than Timberland Bancorp. Timberland Bancorp is trading at a lower price-to-earnings ratio than ACNB, indicating that it is currently the more affordable of the two stocks.

Summary

ACNB beats Timberland Bancorp on 13 of the 18 factors compared between the two stocks.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.

About ACNB

ACNB Corporation, a financial holding company, offers banking, insurance, and financial services to individual, business, and government customers in the United States. The company provides checking, savings, and money market deposit accounts, as well as time deposits and debit cards. It also offers commercial lending products, such as commercial mortgages, real estate development and construction loans, accounts receivable and inventory financing, and agricultural and governmental loans; consumer lending products, including home equity loans and lines of credit, automobile and recreational vehicle loans, manufactured housing loans, and personal lines of credit; and mortgage lending programs include personal residential mortgages, and residential construction and investment mortgage loans. In addition, the company provides other services that are related to testamentary trusts, life insurance trusts, charitable remainder trusts, guardianships, powers of attorney, custodial accounts, and investment management and advisory accounts; and retail brokerage services. Further, it acts as a trustee to invest in, protect, manage, and distribute financial assets. Additionally, the company offers property and casualty, health, life, and disability insurance products to commercial and personal clients; and online, telephone, and mobile banking, as well as automated teller machine services. ACNB Corporation was founded in 1857 and is headquartered in Gettysburg, Pennsylvania.