Contrasting First Guaranty Bancshares (NASDAQ:FGBI) and Cortland Bancorp (NASDAQ:CLDB)

Cortland Bancorp (OTCMKTS:CLDB) and First Guaranty Bancshares (NASDAQ:FGBI) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, analyst recommendations, valuation, profitability, risk and institutional ownership.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Cortland Bancorp and First Guaranty Bancshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cortland Bancorp 0 0 0 0 N/A
First Guaranty Bancshares 0 1 0 0 2.00

First Guaranty Bancshares has a consensus target price of $28.00, suggesting a potential upside of 41.92%. Given First Guaranty Bancshares’ higher probable upside, analysts plainly believe First Guaranty Bancshares is more favorable than Cortland Bancorp.

Volatility and Risk

Cortland Bancorp has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500. Comparatively, First Guaranty Bancshares has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Profitability

This table compares Cortland Bancorp and First Guaranty Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cortland Bancorp 26.40% 14.41% 1.32%
First Guaranty Bancshares 15.79% 9.39% 0.76%

Valuation and Earnings

This table compares Cortland Bancorp and First Guaranty Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cortland Bancorp $33.46 million 3.07 $8.84 million N/A N/A
First Guaranty Bancshares $83.67 million 2.08 $14.21 million N/A N/A

First Guaranty Bancshares has higher revenue and earnings than Cortland Bancorp.

Dividends

Cortland Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 1.9%. First Guaranty Bancshares pays an annual dividend of $0.64 per share and has a dividend yield of 3.2%. First Guaranty Bancshares has raised its dividend for 3 consecutive years. First Guaranty Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

1.6% of Cortland Bancorp shares are owned by institutional investors. Comparatively, 11.4% of First Guaranty Bancshares shares are owned by institutional investors. 9.5% of Cortland Bancorp shares are owned by company insiders. Comparatively, 41.4% of First Guaranty Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

First Guaranty Bancshares beats Cortland Bancorp on 9 of the 13 factors compared between the two stocks.

Cortland Bancorp Company Profile

Cortland Bancorp operates as the bank holding company for The Cortland Savings and Banking Company that provides commercial and retail banking services in Northeastern Ohio and Western Pennsylvania. Its deposit products include demand deposits, savings, money market, time deposit, and checking accounts. The company's loan portfolio comprises commercial loans consisting of commercial, financial loans, real estate construction and development loans, commercial real estate loans, small business lending, and trade financing; and consumer loans, such as residential real estate, home equity, and installment loans. It also provides brokerage and investment services; asset management services; night depository services, automated teller services, safe deposit boxes, and other services; and Internet and mobile banking options. As of February 4, 2019, it operated through 14 offices located in the Summit, Trumbull, Mahoning, Portage, and Ashtabula counties in Northeast Ohio. The company was founded in 1892 and is headquartered in Cortland, Ohio.

First Guaranty Bancshares Company Profile

First Guaranty Bancshares, Inc. operates as the holding company for First Guaranty Bank that provides commercial banking services to businesses, professionals, and individuals in Louisiana and Texas. It offers various deposit products, including personal and business checking, savings, money market, and demand accounts, as well as time deposits. The company also provides loans, such as non-farm non-residential loans secured by real estate, commercial and industrial loans, one- to four-family residential loans, construction and land development loans, agricultural loans, farmland loans, consumer and other loans, and multifamily loans. In addition, it offers a range of consumer services, including personal and commercial credit cards, remote deposit capture, safe deposit boxes, official checks, Internet banking, automated teller machines, online bill pay, mobile banking, and lockbox services. The company operates through 27 banking facilities located in market services areas of Hammond, Baton Rouge, Lafayette, Shreveport-Bossier City, Dallas-Fort Worth-Arlington, and Waco. First Guaranty Bancshares, Inc. was founded in 1934 and is headquartered in Hammond, Louisiana.

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