Citizens Financial Services (NASDAQ:CZFS) and Washington Trust Bancorp (NASDAQ:WASH) Financial Analysis

Citizens Financial Services (NASDAQ:CZFS) and Washington Trust Bancorp (NASDAQ:WASH) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Institutional and Insider Ownership

22.5% of Citizens Financial Services shares are held by institutional investors. Comparatively, 65.8% of Washington Trust Bancorp shares are held by institutional investors. 6.3% of Citizens Financial Services shares are held by insiders. Comparatively, 1.7% of Washington Trust Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Citizens Financial Services pays an annual dividend of $1.96 per share and has a dividend yield of 2.7%. Washington Trust Bancorp pays an annual dividend of $2.24 per share and has a dividend yield of 6.1%. Citizens Financial Services pays out 33.9% of its earnings in the form of a dividend. Washington Trust Bancorp pays out 83.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Washington Trust Bancorp has increased its dividend for 13 consecutive years. Washington Trust Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Citizens Financial Services has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Washington Trust Bancorp has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Citizens Financial Services and Washington Trust Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Citizens Financial Services	0	0	1	0	3.00
Washington Trust Bancorp	0	2	0	0	2.00

Citizens Financial Services currently has a consensus price target of $53.00, suggesting a potential downside of 25.67%. Washington Trust Bancorp has a consensus price target of $34.00, suggesting a potential downside of 7.26%. Given Washington Trust Bancorp’s higher probable upside, analysts plainly believe Washington Trust Bancorp is more favorable than Citizens Financial Services.

Profitability

This table compares Citizens Financial Services and Washington Trust Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Citizens Financial Services	16.24%	9.86%	0.95%
Washington Trust Bancorp	11.24%	9.55%	0.63%

Earnings and Valuation

This table compares Citizens Financial Services and Washington Trust Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Citizens Financial Services	$99.89 million	3.40	$17.81 million	$5.79	12.31
Washington Trust Bancorp	$364.80 million	1.72	$48.18 million	$2.67	13.73

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

Summary

Citizens Financial Services beats Washington Trust Bancorp on 9 of the 17 factors compared between the two stocks.

About Citizens Financial Services

Citizens Financial Services, Inc., a bank holding company, provides various banking products and services for individual, business, governmental, and institutional customers. The company accepts various deposit products, such as checking, savings, and time deposit accounts. Its loan products include residential, commercial, and agricultural real estate loans; commercial and industrial loans; state and political subdivision loans; and consumer loans, as well as various other specialized financial services. The company also provides professional trust administration, investment management services, estate planning and administration, custody of securities, and individual retirement accounts. In addition, it offers brokerage and financial planning services, as well as assistance in various oil and gas leasing matters; and provides mutual funds, annuities, and health and life insurance products. Citizens Financial Services, Inc. was incorporated in 1984 and is headquartered in Mansfield, Pennsylvania.

About Washington Trust Bancorp

Washington Trust Bancorp, Inc. operates as the bank holding company for The Washington Trust Company, of Westerly that provides various banking and financial services to individuals and businesses. The company operates in two segments, Commercial Banking and Wealth Management Services. The Commercial Banking segment offers deposit accounts, including interest-bearing and noninterest-bearing demand deposits, NOW and savings accounts, money market and retirement deposit accounts, and time deposits; various commercial and retail lending products, such as commercial real estate loans, including commercial mortgages, and construction and development loans; commercial and industrial loans comprising working capital, equipment financing, and financing for other business-related purposes; residential real estate loans that consist of mortgage and homeowner construction loans; and consumer loans comprising home equity loans and lines of credit, personal installment loans, and loans to individuals secured by general aviation aircraft. This segment also provides debit cards; automated teller machines (ATMs); telephone banking, internet banking, mobile banking, remote deposit capture, and other cash management services; and investment portfolio and wholesale funding services. The Wealth Management Services segment offers investment management; financial planning; personal trust and estate services, such as trustee, personal representative, custodian, and guardian; and settlement of decedents’ estates, as well as institutional trust services comprising custody and fiduciary services for personal and institutional clients. Washington Trust Bancorp, Inc. was founded in 1800 and is headquartered in Westerly, Rhode Island.