Reviewing CNB Financial (NASDAQ:CCNE) & Peapack-Gladstone Financial (NASDAQ:PGC)

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

Analyst Ratings

This is a breakdown of current ratings and price targets for CNB Financial and Peapack-Gladstone Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CNB Financial	0	2	4	0	2.67
Peapack-Gladstone Financial	0	2	3	0	2.60

CNB Financial currently has a consensus target price of $37.20, indicating a potential upside of 1.13%. Peapack-Gladstone Financial has a consensus target price of $56.33, indicating a potential upside of 18.29%. Given Peapack-Gladstone Financial’s higher possible upside, analysts clearly believe Peapack-Gladstone Financial is more favorable than CNB Financial.

Dividends

CNB Financial pays an annual dividend of $0.76 per share and has a dividend yield of 2.1%. Peapack-Gladstone Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.4%. CNB Financial pays out 20.0% of its earnings in the form of a dividend. Peapack-Gladstone Financial pays out 6.0% 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. CNB Financial has increased its dividend for 1 consecutive years. CNB Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares CNB Financial and Peapack-Gladstone Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CNB Financial	$432.51 million	2.52	$66.13 million	$3.80	9.68
Peapack-Gladstone Financial	$444.61 million	1.90	$37.33 million	$3.33	14.30

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

Risk and Volatility

CNB Financial has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500. Comparatively, Peapack-Gladstone Financial has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.

Profitability

This table compares CNB Financial and Peapack-Gladstone Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CNB Financial	23.26%	13.23%	1.30%
Peapack-Gladstone Financial	12.69%	9.12%	0.79%

Institutional and Insider Ownership

52.3% of CNB Financial shares are owned by institutional investors. Comparatively, 72.8% of Peapack-Gladstone Financial shares are owned by institutional investors. 2.9% of CNB Financial shares are owned by company insiders. Comparatively, 5.8% of Peapack-Gladstone Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

CNB Financial beats Peapack-Gladstone Financial on 10 of the 17 factors compared between the two stocks.

About CNB Financial

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. The company 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. It also provides private banking; and wealth 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, the company invests in debt and equity securities; sells nonproprietary annuities and other insurance products; and offers small balance unsecured loans and secured loans primarily collateralized by automobiles and equipment, as well as engages in consumer discount loan and finance business. The company was founded in 1865 and is headquartered in Clearfield, Pennsylvania.

About Peapack-Gladstone Financial

Peapack-Gladstone Financial Corporation operates as the bank holding company for Peapack-Gladstone Bank that provides private banking and wealth management services in the United States. The company operates in two segments, Banking and Peapack Private. It offers checking and savings accounts, money market and interest-bearing checking accounts, certificates of deposit, and individual retirement accounts. The company also provides working capital lines of credit, term loans for fixed asset acquisitions, commercial mortgages, multi-family mortgages, and other forms of asset-based financing services; and residential mortgages, home equity lines of credit, and other second mortgage loans. In addition, it offers corporate and industrial (C&I) and equipment finance, commercial real estate, multifamily, residential, and consumer lending activities; treasury management services; C&I advisory services; escrow management; deposit generation; investment management services; personal trust services, including services as executor, trustee, administrator, custodian, and guardian; and other financial planning, tax preparation, and advisory services. Further, the company provides telephone and Internet banking, merchant credit card, and customer support sales services. Its private banking clients include businesses, non-profits, and consumers; wealth management clients comprise individuals, families, foundations, endowments, trusts, and estates; and commercial loan clients include business owners, professionals, retailers, contractors, and real estate investors. The company operates its private banking locations in Bedminster, Morristown, Princeton, and Teaneck, New Jersey; and branches in Somerset, Morris, Hunterdon, and Union counties, as well as operates automated teller machines. Peapack-Gladstone Financial Corporation was founded in 1921 and is headquartered in Bedminster, New Jersey.