Citizens (NASDAQ:CIZN) & First Business Financial Services (NASDAQ:FBIZ) Head to Head Contrast

First Business Financial Services (NASDAQ:FBIZ) and Citizens (NASDAQ:CIZN) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Institutional & Insider Ownership

60.1% of First Business Financial Services shares are owned by institutional investors. Comparatively, 9.7% of Citizens shares are owned by institutional investors. 5.0% of First Business Financial Services shares are owned by insiders. Comparatively, 8.9% of Citizens shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for First Business Financial Services and Citizens, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Business Financial Services	0	0	4	1	3.20
Citizens	0	1	5	0	2.83

First Business Financial Services currently has a consensus target price of $82.50, indicating a potential upside of 9.90%. Citizens has a consensus target price of $16.83, indicating a potential upside of 70.90%. Given Citizens’ higher possible upside, analysts plainly believe Citizens is more favorable than First Business Financial Services.

Dividends

First Business Financial Services pays an annual dividend of $1.36 per share and has a dividend yield of 1.8%. Citizens pays an annual dividend of $0.08 per share and has a dividend yield of 0.8%. First Business Financial Services pays out 20.0% of its earnings in the form of a dividend. Citizens pays out 4.0% 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. First Business Financial Services has increased its dividend for 13 consecutive years and Citizens has increased its dividend for 1 consecutive years. First Business Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares First Business Financial Services and Citizens’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Business Financial Services	19.93%	15.04%	1.31%
Citizens	7.00%	11.28%	0.37%

Volatility and Risk

First Business Financial Services has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Citizens has a beta of 0.13, meaning that its stock price is 87% less volatile than the S&P 500.

Valuation & Earnings

This table compares First Business Financial Services and Citizens”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Business Financial Services	$279.25 million	2.24	$50.32 million	$6.81	11.02
Citizens	$40.95 million	1.37	$5.49 million	$2.02	4.88

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

Summary

First Business Financial Services beats Citizens on 14 of the 18 factors compared between the two stocks.

About First Business Financial Services

First Business Financial Services, Inc. is a bank holding company headquartered in Madison, Wisconsin. Through First Business Bank and related businesses, it provides commercial banking, specialty finance, and wealth management services to businesses, business owners, and professionals. Its offerings include business loans and deposit accounts, cash and treasury management, and trust and investment services. Specialty finance services include asset-based lending, accounts receivable financing, and equipment financing.

About Citizens

Citizens Holding Company was a bank holding company for Citizens Bank, a community banking institution headquartered in Philadelphia, Mississippi. The bank served individuals, businesses and public-sector customers through traditional banking products and services. Its offerings included checking and savings accounts, certificates of deposit, consumer and residential mortgage loans, commercial and agricultural lending, online banking and other deposit and credit services. Citizens Bank operated primarily in Mississippi, with a branch network focused on communities in the state’s east-central region.