Critical Comparison: Commercial National Financial (OTCMKTS:CEFC) & First Financial Bancorp. (NASDAQ:FFBC)

Commercial National Financial (OTCMKTS:CEFC) and First Financial Bancorp. (NASDAQ:FFBC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Commercial National Financial and First Financial Bancorp., 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
First Financial Bancorp.	0	4	4	0	2.50

First Financial Bancorp. has a consensus price target of $29.83, suggesting a potential upside of 23.84%. Given First Financial Bancorp.’s stronger consensus rating and higher possible upside, analysts plainly believe First Financial Bancorp. is more favorable than Commercial National Financial.

Dividends

Commercial National Financial pays an annual dividend of $0.56 per share and has a dividend yield of 4.6%. First Financial Bancorp. pays an annual dividend of $1.00 per share and has a dividend yield of 4.2%. Commercial National Financial pays out 35.0% of its earnings in the form of a dividend. First Financial Bancorp. pays out 37.0% 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 Financial Bancorp. has increased its dividend for 1 consecutive years. Commercial National Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Commercial National Financial and First Financial Bancorp.”s top-line 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	1.67	$5.86 million	$1.60	7.65
First Financial Bancorp.	$1.62 billion	1.42	$228.83 million	$2.70	8.92

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Commercial National Financial	22.02%	N/A	N/A
First Financial Bancorp.	20.64%	10.86%	1.46%

Risk & Volatility

Commercial National Financial has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500. Comparatively, First Financial Bancorp. has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Insider & Institutional Ownership

77.2% of First Financial Bancorp. shares are owned by institutional investors. 23.0% of Commercial National Financial shares are owned by company insiders. Comparatively, 1.1% of First Financial Bancorp. shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

First Financial Bancorp. beats Commercial National Financial on 12 of the 17 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 First Financial Bancorp.

First Financial Bancorp. operates as the bank holding company for First Financial Bank that provides commercial banking and related services to individuals and businesses in Ohio, Indiana, Kentucky, and Illinois. The company offers checking, savings, and money-market accounts; and accepts various deposit products, such as interest-bearing and non-interest-bearing accounts, time deposits, and cash management services for commercial customers. It also provides real estate loans secured by residential property, such as one to four family residential housing units or commercial property comprising owner-occupied and/or investor income producing real estate consisting of apartments, shopping centers, and office buildings; commercial and industrial loans for various purposes, including inventory, receivables, and equipment, as well as equipment and leasehold improvement financing for franchisees; consumer loans comprising new and used vehicle loans, second mortgages on residential real estate, and unsecured loans; and home equity lines of credit. In addition, the company offers commercial financing to the insurance industry, registered investment advisors, certified public accountants, indirect auto finance companies, and restaurant franchisees. Further, it provides a range of trust and wealth management services; lease and equipment financing services; and currency payments, foreign exchange hedging, and other advisory products. First Financial Bancorp. was founded in 1863 and is headquartered in Cincinnati, Ohio.