Analyzing Civista Bancshares (NASDAQ:CIVB) & TowneBank (NASDAQ:TOWN)

TowneBank (NASDAQ:TOWN) and Civista Bancshares (NASDAQ:CIVB) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Risk & Volatility

TowneBank has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Civista Bancshares has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Insider & Institutional Ownership

56.0% of TowneBank shares are owned by institutional investors. Comparatively, 52.1% of Civista Bancshares shares are owned by institutional investors. 8.1% of TowneBank shares are owned by insiders. Comparatively, 3.0% of Civista Bancshares shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

TowneBank pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Civista Bancshares pays an annual dividend of $0.64 per share and has a dividend yield of 2.8%. TowneBank pays out 50.3% of its earnings in the form of a dividend. Civista Bancshares pays out 31.8% 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. TowneBank has increased its dividend for 12 consecutive years and Civista Bancshares has increased its dividend for 13 consecutive years.

Analyst Recommendations

This is a summary of current ratings and recommmendations for TowneBank and Civista Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TowneBank	0	0	2	0	3.00
Civista Bancshares	0	2	2	0	2.50

TowneBank presently has a consensus target price of $36.00, suggesting a potential upside of 2.13%. Civista Bancshares has a consensus target price of $20.25, suggesting a potential downside of 10.91%. Given TowneBank’s stronger consensus rating and higher probable upside, equities analysts clearly believe TowneBank is more favorable than Civista Bancshares.

Profitability

This table compares TowneBank and Civista Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TowneBank	14.89%	7.41%	0.91%
Civista Bancshares	13.12%	8.46%	0.80%

Valuation and Earnings

This table compares TowneBank and Civista Bancshares”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TowneBank	$673.10 million	3.93	$153.71 million	$1.99	17.71
Civista Bancshares	$219.90 million	1.63	$42.96 million	$2.01	11.31

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

Summary

TowneBank beats Civista Bancshares on 12 of the 16 factors compared between the two stocks.

About TowneBank

TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals. The company operates through three segments: Banking, Realty, and Insurance. It accepts various deposits, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate acquisition, development, and construction loans. In addition, it provides other services, such as safe deposit boxes, treasury management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as online, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; investment and asset management services; commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options comprising alternative investments, annuities, margin accounts, convertible bonds, and pension and profit-sharing plans. Additionally, it provides residential real estate, relocation, property management, vacation rentals, and title and settlement services; and originates residential mortgage loans. The company also offers life, property, casualty, and vehicle insurance services; and employee benefit programs, such as health, dental, vision, and disability insurance. It operates in Richmond, Virginia, the Greater Hampton Roads region in southeastern Virginia, northeastern North Carolina, Raleigh, Charlotte, Greensboro, and Greenville, North Carolina. TowneBank was incorporated in 1998 and is based in Portsmouth, Virginia.

About Civista Bancshares

Civista Bancshares, Inc. operates as the financial holding company for Civista Bank that provides community banking services. It collects a range of customer deposits; and offers commercial and agriculture, commercial and residential real estate, farm real estate, real estate construction, consumer, and other loans, as well as letters of credit. The company also holds and manages securities portfolio; leases general equipment; and provides captive insurance products. It operates in North Central, West Central, South Western Ohio, South Eastern Indiana, and Northern Kentucky. The company was formerly known as First Citizens Banc Corp and changed its name to Civista Bancshares, Inc. in May 2015. Civista Bancshares, Inc. was founded in 1884 and is headquartered in Sandusky, Ohio.