Enterprise Bancorp (NASDAQ:EBTC) and C&F Financial (NASDAQ:CFFI) Critical Contrast

Enterprise Bancorp (NASDAQ:EBTC) and C&F Financial (NASDAQ:CFFI) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, earnings, profitability, analyst recommendations, risk, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Enterprise Bancorp and C&F Financial, as provided by MarketBeat.com.

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

Institutional & Insider Ownership

21.3% of Enterprise Bancorp shares are held by institutional investors. Comparatively, 35.6% of C&F Financial shares are held by institutional investors. 20.5% of Enterprise Bancorp shares are held by insiders. Comparatively, 6.0% of C&F Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

Enterprise Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.0%. C&F Financial pays an annual dividend of $1.52 per share and has a dividend yield of 2.9%. Enterprise Bancorp has raised its dividend for 6 consecutive years and C&F Financial has raised its dividend for 7 consecutive years. C&F Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Enterprise Bancorp has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, C&F Financial has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Enterprise Bancorp 21.64% 11.70% 1.04%
C&F Financial 14.92% 12.00% 1.20%

Valuation and Earnings

This table compares Enterprise Bancorp and C&F Financial’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enterprise Bancorp $134.89 million 2.84 $28.88 million N/A N/A
C&F Financial $118.31 million 1.50 $18.02 million N/A N/A

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

Summary

Enterprise Bancorp beats C&F Financial on 7 of the 12 factors compared between the two stocks.

Enterprise Bancorp Company Profile

Enterprise Bancorp, Inc. operates as the holding company for Enterprise Bank and Trust Company that provides various banking products and services primarily in the greater Merrimack Valley and North Central regions of Massachusetts and Southern New Hampshire. The company offers commercial checking, business and municipal savings accounts, term certificates of deposit, money market and business sweep accounts, interest on lawyers trust accounts, escrow management accounts, personal checking accounts, savings accounts, and individual retirement accounts, as well as checking and simplified employee pension accounts. It also provides commercial mortgage loans, construction and land development loans, secured and unsecured commercial loans and lines of credit, and letters of credit; and conventional residential mortgage loans, home equity loans and lines, residential construction loans on primary and secondary residences, and secured and unsecured personal loans and lines of credit, as well as equipment lease financing services. In addition, the company offers cash management services; various investment advisory and management services, including customized investment management and trust services to individuals, family groups, commercial businesses, trusts, foundations, non-profit organizations, and endowments; and insurance products, such as property and casualty, employee benefits, and risk-management solutions. As of January 25, 2018, it had 24 full-service branches located in the Massachusetts communities of Lowell, Acton, Andover, Billerica, Chelmsford, Dracut, Fitchburg, Lawrence, Leominster, Methuen, Tewksbury, Tyngsborough, and Westford; and the New Hampshire communities of Derry, Hudson, Nashua, Pelham, Salem, and Windham. The company primarily serves business entities, non-profit organizations, professionals, and individuals. Enterprise Bancorp, Inc. was founded in 1989 and is headquartered in Lowell, Massachusetts.

C&F Financial Company Profile

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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