Financial Analysis: First Guaranty Bancshares (NASDAQ:FGBI) versus Cortland Bancorp (NASDAQ:CLDB)

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

Analyst Recommendations

This is a breakdown of current recommendations for Cortland Bancorp and First Guaranty Bancshares, as reported 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 price target of $28.00, indicating a potential upside of 36.39%. Given First Guaranty Bancshares’ higher probable upside, analysts plainly believe First Guaranty Bancshares is more favorable than Cortland Bancorp.

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%

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cortland Bancorp $33.46 million 2.99 $8.84 million N/A N/A
First Guaranty Bancshares $83.67 million 2.16 $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 3.1%. 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.

Institutional & Insider 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 large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Cortland Bancorp has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500. Comparatively, First Guaranty Bancshares has a beta of 0.37, suggesting that its share price is 63% less volatile than the S&P 500.

Summary

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

About Cortland Bancorp

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.

About First Guaranty Bancshares

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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