Reviewing Commercial National Financial (OTCMKTS:CEFC) & Ames National (NASDAQ:ATLO)

Commercial National Financial (OTCMKTS:CEFC) and Ames National (NASDAQ:ATLO) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares Commercial National Financial and Ames National’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Commercial National Financial	23.49%	N/A	N/A
Ames National	16.68%	8.73%	0.75%

Earnings and Valuation

This table compares Commercial National Financial and Ames National”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Commercial National Financial	$29.17 million	1.70	$5.86 million	$1.69	7.40
Ames National	$62.90 million	2.98	$10.22 million	$1.80	11.71

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

Dividends

Commercial National Financial pays an annual dividend of $0.56 per share and has a dividend yield of 4.5%. Ames National pays an annual dividend of $0.80 per share and has a dividend yield of 3.8%. Commercial National Financial pays out 33.1% of its earnings in the form of a dividend. Ames National pays out 44.4% 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. Commercial National Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Commercial National Financial has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500. Comparatively, Ames National has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.

Institutional & Insider Ownership

26.5% of Ames National shares are held by institutional investors. 23.0% of Commercial National Financial shares are held by company insiders. Comparatively, 2.1% of Ames National shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Commercial National Financial and Ames National, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Commercial National Financial	0	0	0	0	0.00
Ames National	0	1	0	0	2.00

Summary

Ames National beats Commercial National Financial on 10 of the 14 factors compared between the two stocks.

About Commercial National Financial

Commercial National Financial Corporation operates as the holding company for Commercial Bank that provides various banking products and services to individuals, agricultural businesses, commercial businesses, and light industries in Michigan. The company accepts various deposit products, including checking and savings accounts, individual retirement accounts, certificates of deposit, and health savings accounts. It also offers personal loan products, such as automobile loans, recreational vehicle loans, personal lines of credit, and unsecured term loans, as well as home equity loans and mortgage loans; and business loans, including secured lines of credit, business equity line of credit, SBA loans, equipment loans, real estate loans, vehicle loans, term loans, USDA loan programs, and capital access loan programs. In addition, the company provides other services comprising business VISA check cards, debit and ATM cards, business statement savings, business certificates of deposit, merchant services, night depository, telephone banking, online banking, e-statements, direct deposit of payroll for employees, child support payments, collection of receivables, and remote deposit capture, as well as treasury services. It provides its services through offices located in Barry, Gratiot, Ingham, Kent, and Montcalm counties in Michigan. The company was founded in 1893 and is headquartered in Ithaca, Michigan.

About Ames National

Ames National Corporation operates as a multi-bank holding company that provides banking products and services primarily in Boone, Clarke, Hancock, Marshall, Polk, Story, and Union counties in central, north central, and south-central Iowa. The company accepts various deposit products, including checking and savings accounts; and time deposits, such as money market accounts and certificates of deposit. It also provides loans, such as short-term and medium-term commercial and agricultural real estate, residential real estate loans, equipment, vehicle, and home improvement loans; consumer loans to finance consumer purchases, such as automobiles, trucks, recreational vehicles, household furnishings, boats, personal loans, and lines of credit; agricultural and business operating loans and lines of credit; and originates mortgage loans for sale into the secondary market. In addition, the company offers cash management, merchant credit card processing, safe deposit box, wire transfer, direct deposit, and automated/video teller machine access services; and automatic drafts for various accounts, as well as wealth management services. Further, it provides farm management, investment, and custodial services for individuals, businesses, and non-profit organizations; and online, mobile, and private banking services. Ames National Corporation was incorporated in 1903 and is headquartered in Ames, Iowa.