Financial Review: Lyons Bancorp (OTCMKTS:LYBC) vs. Peoples Financial Services (NASDAQ:PFIS)

Lyons Bancorp (OTCMKTS:LYBC) and Peoples Financial Services (NASDAQ:PFIS) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Institutional and Insider Ownership

0.3% of Lyons Bancorp shares are owned by institutional investors. Comparatively, 31.7% of Peoples Financial Services shares are owned by institutional investors. 4.1% of Peoples Financial Services 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.

Earnings and Valuation

This table compares Lyons Bancorp and Peoples Financial Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lyons Bancorp	$70.28 million	1.95	$17.35 million	$4.45	9.16
Peoples Financial Services	$163.98 million	3.58	$27.38 million	$1.03	57.05

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

Profitability

This table compares Lyons Bancorp and Peoples Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lyons Bancorp	N/A	N/A	N/A
Peoples Financial Services	3.00%	7.73%	0.71%

Volatility & Risk

Lyons Bancorp has a beta of -0.07, meaning that its share price is 107% less volatile than the S&P 500. Comparatively, Peoples Financial Services has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Lyons Bancorp and Peoples Financial Services, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lyons Bancorp	0	0	0	0	0.00
Peoples Financial Services	0	2	0	0	2.00

Peoples Financial Services has a consensus target price of $50.00, suggesting a potential downside of 14.91%. Given Peoples Financial Services’ stronger consensus rating and higher probable upside, analysts clearly believe Peoples Financial Services is more favorable than Lyons Bancorp.

Dividends

Lyons Bancorp pays an annual dividend of $1.60 per share and has a dividend yield of 3.9%. Peoples Financial Services pays an annual dividend of $2.47 per share and has a dividend yield of 4.2%. Lyons Bancorp pays out 36.0% of its earnings in the form of a dividend. Peoples Financial Services pays out 239.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Peoples Financial Services beats Lyons Bancorp on 13 of the 15 factors compared between the two stocks.

About Lyons Bancorp

Lyons Bancorp Inc. operates as a financial holding company for The Lyons National Bank that provides a range of commercial and retail banking services to individual and small business customers. It offers checking accounts, savings accounts, individual retirement accounts, and certificates of deposit; commercial real estate, agricultural real estate, commercial and agricultural, and consumer instalment loans; and residential real estate loans, such as classes for 1-4 family and home equity loans, as well as consumer loans comprising recreational, auto, personal, personal line of credit, and home improvement loans; financial services, including retirement strategy, investment management, education savings, life insurance, long-term care insurance, and employer and employee benefit services. The company also provides mortgage, online and mobile banking, telephone banking, credit and debit card, online cash management, merchant, safe deposit boxes, wire transfer, traveller program, online bill pay, e-statements, money orders, and official checks services. It operates branches in Wayne, Onondaga, Yates, Ontario, Monroe, Seneca, and Cayuga counties, New York. The company was founded in 1852 and is headquartered in Lyons, New York.

About Peoples Financial Services

Peoples Financial Services Corp. operates as the bank holding company for Peoples Security Bank and Trust Company that provides various commercial and retail banking services. The company accepts money market, negotiable order of withdrawal, savings, individual retirement, demand deposit, and certificates of deposit accounts. It also provides residential real estate, automobile, manufactured housing, personal, and home equity loans; and commercial real estate, working capital, construction, small business administration, and agricultural loans, as well as loans for equipment and other commercial needs, and mineral rights. In addition, the company offers fiduciary and investment services; investment management, IRA trustee, estate administration, living and life insurance trust, trustee under will, guardianship, custodial/IRA custodial, and corporate trust services, as well as pension and profit-sharing plans. Further, it provides wealth management products and services comprising investment portfolio management, estate and business succession planning, annuities, insurance, retirement plan, and tax planning, as well as education funding strategies; and securities, brokerage, and investor services. Additionally, the company offers small business checking and merchant money market accounts, online and telephone banking, business credit cards, merchant line of credit, and financial checkup services; and remote deposit capture, automatic clearing house transaction, cash management, automated teller machine, point of sale transaction, safe deposit box, night depository, direct deposit, and official check services. It serves business, non-profit, governmental, municipal agency, and professional customers, as well as retail customers. Peoples Financial Services Corp. was founded in 1905 and is headquartered in Scranton, Pennsylvania.