Critical Survey: Lloyds Banking Group (NYSE:LYG) & Auburn National Bancorporation (NASDAQ:AUBN)

Lloyds Banking Group (NYSE:LYG) and Auburn National Bancorporation (NASDAQ:AUBN) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Lloyds Banking Group and Auburn National Bancorporation, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lloyds Banking Group	1	3	7	0	2.55
Auburn National Bancorporation	0	1	0	0	2.00

Lloyds Banking Group currently has a consensus target price of $6.00, suggesting a potential upside of 11.01%. Given Lloyds Banking Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Lloyds Banking Group is more favorable than Auburn National Bancorporation.

Profitability

This table compares Lloyds Banking Group and Auburn National Bancorporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lloyds Banking Group	24.97%	10.94%	0.54%
Auburn National Bancorporation	18.60%	9.10%	0.81%

Volatility & Risk

Lloyds Banking Group has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, Auburn National Bancorporation has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.

Dividends

Lloyds Banking Group pays an annual dividend of $0.16 per share and has a dividend yield of 3.0%. Auburn National Bancorporation pays an annual dividend of $1.08 per share and has a dividend yield of 4.1%. Lloyds Banking Group pays out 37.2% of its earnings in the form of a dividend. Auburn National Bancorporation pays out 44.8% 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.

Institutional & Insider Ownership

2.2% of Lloyds Banking Group shares are held by institutional investors. Comparatively, 39.5% of Auburn National Bancorporation shares are held by institutional investors. 0.0% of Lloyds Banking Group shares are held by insiders. Comparatively, 18.7% of Auburn National Bancorporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Lloyds Banking Group and Auburn National Bancorporation”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lloyds Banking Group	$21.25 billion	3.69	$6.14 billion	$0.43	12.57
Auburn National Bancorporation	$34.26 million	2.70	$7.26 million	$2.41	11.01

Lloyds Banking Group has higher revenue and earnings than Auburn National Bancorporation. Auburn National Bancorporation is trading at a lower price-to-earnings ratio than Lloyds Banking Group, indicating that it is currently the more affordable of the two stocks.

Summary

Lloyds Banking Group beats Auburn National Bancorporation on 11 of the 16 factors compared between the two stocks.

About Lloyds Banking Group

Lloyds Banking Group plc, together with its subsidiaries, provides a range of banking and financial services in the United Kingdom and internationally. It operates in three segments: Retail; Commercial Banking; and Insurance, Pensions and Investments. The Retail segment offers a range of financial service products, including current accounts, savings, mortgages, motor finance, unsecured loans, leasing solutions, and credit cards to personal customers. The Commercial Banking segment provides lending, transactional banking, working capital management, risk management, and debt financing services to small and medium-sized entities, corporates, and institutions. The Insurance, Pensions, and Investments segment offers insurance, investment, and pension management products and services. It also provides digital banking services. The company offers its products and services under the Lloyds Bank, Halifax, Bank of Scotland, Scottish Widows, MBNA, Schroders Personal Wealth, Black Horse, Lex Autolease, Birmingham Midshires, LDC, AMC, Embark Group, Citra, IWeb, Cavendish Online, and Tusker brand names. Lloyds Banking Group plc was founded in 1695 and is headquartered in London, the United Kingdom.

About Auburn National Bancorporation

Auburn National Bancorporation, Inc. operates as the bank holding company for AuburnBank that provides various banking products and services in East Alabama. The company offers checking, savings, and transaction deposit accounts, as well as certificates of deposit. It also provides commercial, financial, agricultural, real estate construction, and consumer loan products; and other financial services. In addition, the company offers automated teller services; debit cards; online banking, bill payment, and other electronic banking services; and safe deposit boxes. Auburn National Bancorporation, Inc. was founded in 1907 and is headquartered in Auburn, Alabama.