Critical Analysis: Stock Yards Bancorp (NASDAQ:SYBT) and Chemung Financial (NASDAQ:CHMG)

Stock Yards Bancorp (NASDAQ:SYBT) and Chemung Financial (NASDAQ:CHMG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Dividends

Stock Yards Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 1.8%. Chemung Financial pays an annual dividend of $1.36 per share and has a dividend yield of 2.5%. Stock Yards Bancorp pays out 29.4% of its earnings in the form of a dividend. Chemung Financial pays out 58.1% 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. Stock Yards Bancorp has raised its dividend for 15 consecutive years and Chemung Financial has raised its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Stock Yards Bancorp and Chemung Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stock Yards Bancorp	0	4	0	0	2.00
Chemung Financial	0	3	0	0	2.00

Stock Yards Bancorp currently has a consensus target price of $79.75, suggesting a potential upside of 11.98%. Chemung Financial has a consensus target price of $54.50, suggesting a potential upside of 2.06%. Given Stock Yards Bancorp’s higher probable upside, analysts plainly believe Stock Yards Bancorp is more favorable than Chemung Financial.

Institutional & Insider Ownership

56.5% of Stock Yards Bancorp shares are owned by institutional investors. Comparatively, 47.5% of Chemung Financial shares are owned by institutional investors. 3.4% of Stock Yards Bancorp shares are owned by company insiders. Comparatively, 12.0% of Chemung Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Stock Yards Bancorp and Chemung Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stock Yards Bancorp	23.86%	13.31%	1.45%
Chemung Financial	8.19%	10.67%	0.86%

Risk & Volatility

Stock Yards Bancorp has a beta of 0.73, meaning that its share price is 27% less volatile than the S&P 500. Comparatively, Chemung Financial has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500.

Earnings and Valuation

This table compares Stock Yards Bancorp and Chemung Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stock Yards Bancorp	$508.11 million	4.13	$114.54 million	$4.35	16.37
Chemung Financial	$150.79 million	1.70	$23.67 million	$2.34	22.82

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

Summary

Stock Yards Bancorp beats Chemung Financial on 12 of the 15 factors compared between the two stocks.

About Stock Yards Bancorp

Stock Yards Bancorp, Inc. operates as a holding company for Stock Yards Bank & Trust Company that provides various financial services for individuals, corporations, and others in the United States. It operates in two segments, Commercial Banking, and WM&T. The Commercial Banking segment offers a range of loan and deposit products to individual consumers and businesses in all its markets through retail lending, mortgage banking, deposit services, online banking, mobile banking, private banking, commercial lending, commercial real estate lending, leasing, treasury management services, merchant services, international banking, correspondent banking, and other banking services. This segment also provides securities brokerage services through an arrangement with a third party broker-dealer. The WM&T segment provides investment management, financial and retirement planning, and trust and estate services, as well as retirement plan management for businesses and corporations. It provides services in Louisville, central, eastern, and northern Kentucky, as well as Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets. The company was founded in 1904 and is headquartered in Louisville, Kentucky.

About Chemung Financial

Chemung Financial Corporation operates as a bank holding company for Chemung Canal Trust Company that provides a range of banking, financing, fiduciary, and other financial services. The company provides demand, savings, and time deposits; non-interest and interest-bearing checking accounts; and insured money market accounts. It also offers commercial and agricultural loans comprising loans to small to mid-sized businesses; commercial and residential mortgage loans; and consumer loans, including home equity lines of credit and home equity term loans. In addition, the company provides interest rate swaps, letters of credit, employee benefit plans, insurance products, mutual fund, brokerage, and tax preparation services. Further, it offers guardian, custodian, trustee, investment, pension, estate planning, and employee benefit administrative services, as well as acts as an agent for pension, profit-sharing, and other employee benefit trusts. Chemung Financial Corporation was founded in 1833 and is headquartered in Elmira, New York.