Head to Head Review: CNB Financial (CCNE) vs. 1st Source (SRCE)

CNB Financial (NASDAQ:CCNE) and 1st Source (NASDAQ:SRCE) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for CNB Financial and 1st Source, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CNB Financial 0 1 1 0 2.50
1st Source 0 1 1 0 2.50

CNB Financial currently has a consensus price target of $32.25, indicating a potential upside of 26.03%. 1st Source has a consensus price target of $56.00, indicating a potential upside of 19.05%. Given CNB Financial’s higher possible upside, equities analysts plainly believe CNB Financial is more favorable than 1st Source.

Volatility and Risk

CNB Financial has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, 1st Source has a beta of 0.96, meaning that its share price is 4% less volatile than the S&P 500.

Institutional and Insider Ownership

44.6% of CNB Financial shares are held by institutional investors. Comparatively, 70.8% of 1st Source shares are held by institutional investors. 4.2% of CNB Financial shares are held by insiders. Comparatively, 19.9% of 1st Source shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares CNB Financial and 1st Source’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CNB Financial 19.33% 12.69% 1.08%
1st Source 22.98% 10.41% 1.24%

Valuation & Earnings

This table compares CNB Financial and 1st Source’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CNB Financial $130.31 million 3.00 $23.86 million $1.77 14.46
1st Source $311.09 million 3.93 $68.05 million $2.50 18.82

1st Source has higher revenue and earnings than CNB Financial. CNB Financial is trading at a lower price-to-earnings ratio than 1st Source, indicating that it is currently the more affordable of the two stocks.

Dividends

CNB Financial pays an annual dividend of $0.68 per share and has a dividend yield of 2.7%. 1st Source pays an annual dividend of $1.00 per share and has a dividend yield of 2.1%. CNB Financial pays out 38.4% of its earnings in the form of a dividend. 1st Source pays out 40.0% 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. 1st Source has increased its dividend for 32 consecutive years. CNB Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

1st Source beats CNB Financial on 11 of the 15 factors compared between the two stocks.

CNB Financial Company Profile

CNB Financial Corporation operates as the bank holding company for CNB Bank that provides a range of banking products and services for individual, business, governmental, and institutional customers. It accepts checking, savings, and time deposit accounts; and offers real estate, commercial, industrial, residential, and consumer loans, as well as various other specialized financial services. The company also provides trust and asset management services, including the administration of trusts and estates, retirement plans, and other employee benefit plans, as well as a range of wealth management services. In addition, it invests in debt and equity securities; sells nonproprietary annuities and other insurance products; and small balance unsecured loans and secured loans primarily collateralized by automobiles and equipment. As of February 13, 2018, the company operated 31 full-service offices in Pennsylvania and northeast Ohio; 7 full-service offices and 1 loan production office in central Ohio; and 3 full-service offices in northwest New York. CNB Financial Corporation was founded in 1865 and is headquartered in Clearfield, Pennsylvania.

1st Source Company Profile

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and investment management services, and insurance to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate loans, and lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides a range of trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for new and used aircraft, auto and light trucks, construction equipment, and medium and heavy duty trucks; and leases construction equipment, various types of trucks, vans, automobiles, motor coaches, shuttle buses, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services; and investment advisory services to trust and investment clients. As of December 31, 2017, the company operated through 79 banking centers in 17 counties in Indiana and Michigan, and Sarasota County in Florida. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.

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