CF Bankshares (NASDAQ:CFBK) vs. Capital Bancorp (NASDAQ:CBNK) Head to Head Review

Capital Bancorp (NASDAQ:CBNK) and CF Bankshares (NASDAQ:CFBK) are both small-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Profitability

This table compares Capital Bancorp and CF Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capital Bancorp	16.41%	15.13%	1.70%
CF Bankshares	12.78%	9.23%	0.77%

Earnings & Valuation

This table compares Capital Bancorp and CF Bankshares”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capital Bancorp	$244.71 million	2.00	$30.97 million	$2.94	10.06
CF Bankshares	$123.56 million	1.23	$13.39 million	$2.49	9.56

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Capital Bancorp and CF Bankshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capital Bancorp	1	2	2	0	2.20
CF Bankshares	0	2	1	0	2.33

Capital Bancorp currently has a consensus target price of $34.33, indicating a potential upside of 16.07%. CF Bankshares has a consensus target price of $29.00, indicating a potential upside of 21.85%. Given CF Bankshares’ stronger consensus rating and higher probable upside, analysts plainly believe CF Bankshares is more favorable than Capital Bancorp.

Insider and Institutional Ownership

56.1% of Capital Bancorp shares are held by institutional investors. Comparatively, 41.1% of CF Bankshares shares are held by institutional investors. 31.6% of Capital Bancorp shares are held by insiders. Comparatively, 21.0% of CF Bankshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Capital Bancorp has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500. Comparatively, CF Bankshares has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Dividends

Capital Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.6%. CF Bankshares pays an annual dividend of $0.32 per share and has a dividend yield of 1.3%. Capital Bancorp pays out 16.3% of its earnings in the form of a dividend. CF Bankshares pays out 12.9% 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. Capital Bancorp has increased its dividend for 3 consecutive years and CF Bankshares has increased its dividend for 4 consecutive years.

Summary

Capital Bancorp beats CF Bankshares on 13 of the 17 factors compared between the two stocks.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.

About CF Bankshares

CF Bankshares Inc. operates as the bank holding company for CFBank, National Association that provides various banking products and services in the United States. The company accepts savings, retail and business checking accounts, and money market accounts, as well as certificates of deposit. It offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans and equipment leases; residential real estate loans and treasury management depository services; retail banking services and products. In addition, the company offers consumer loans, such as home equity lines of credit, home improvement loans, and loans secured by deposits and purchased loans, as well as other loans. Further, it provides online internet banking, mobile banking, and remote deposits. The company was formerly known as Central Federal Corporation and changed its name to CF Bankshares Inc. in July 2020. CF Bankshares Inc. was founded in 1892 and is based in Columbus, Ohio.