CF Bankshares (NASDAQ:CFBK – Get Free Report) and VersaBank (NASDAQ:VBNK – Get Free Report) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.
Dividends
CF Bankshares pays an annual dividend of $0.36 per share and has a dividend yield of 1.1%. VersaBank pays an annual dividend of $0.07 per share and has a dividend yield of 0.3%. CF Bankshares pays out 12.4% of its earnings in the form of a dividend. VersaBank pays out 9.2% 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. CF Bankshares has raised its dividend for 4 consecutive years. CF Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
41.1% of CF Bankshares shares are held by institutional investors. Comparatively, 56.9% of VersaBank shares are held by institutional investors. 17.7% of CF Bankshares shares are held by company insiders. Comparatively, 5.3% of VersaBank shares are held 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.
Risk & Volatility
CF Bankshares has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, VersaBank has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings and recommmendations for CF Bankshares and VersaBank, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| CF Bankshares | 0 | 0 | 2 | 0 | 3.00 |
| VersaBank | 0 | 1 | 3 | 0 | 2.75 |
CF Bankshares currently has a consensus target price of $40.00, indicating a potential upside of 19.40%. VersaBank has a consensus target price of $24.00, indicating a potential upside of 7.72%. Given CF Bankshares’ stronger consensus rating and higher possible upside, equities analysts plainly believe CF Bankshares is more favorable than VersaBank.
Valuation & Earnings
This table compares CF Bankshares and VersaBank”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| CF Bankshares | $61.81 million | 3.48 | $17.54 million | $2.91 | 11.51 |
| VersaBank | $217.14 million | 3.33 | $20.32 million | $0.76 | 29.32 |
VersaBank has higher revenue and earnings than CF Bankshares. CF Bankshares is trading at a lower price-to-earnings ratio than VersaBank, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares CF Bankshares and VersaBank’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| CF Bankshares | 15.10% | 10.10% | 0.88% |
| VersaBank | 9.92% | 8.66% | 0.75% |
Summary
CF Bankshares beats VersaBank on 10 of the 17 factors compared between the two stocks.
About CF Bankshares
CF Bankshares Inc. operates as the bank holding company for CFBank, National Association that provides various banking products and services in the United States. The company accepts savings, retail and business checking accounts, and money market accounts, as well as certificates of deposit. It offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans and equipment leases; residential real estate loans and treasury management depository services; retail banking services and products. In addition, the company offers consumer loans, such as home equity lines of credit, home improvement loans, and loans secured by deposits and purchased loans, as well as other loans. Further, it provides online internet banking, mobile banking, and remote deposits. The company was formerly known as Central Federal Corporation and changed its name to CF Bankshares Inc. in July 2020. CF Bankshares Inc. was founded in 1892 and is based in Columbus, Ohio.
About VersaBank
VersaBank provides various banking products and services in Canada and the United States. It offers deposit products, such as web-based chequing accounts, guaranteed investment certificates, registered retirement savings plans, and tax-free savings accounts, as well as deposit insurance products. The company also provides lending services, including point of sale financing that covers purchasing loan and lease receivables from finance companies operating in various industries; commercial banking services comprising commercial real estate, public sector/infrastructure financing, and condominium financing; and residential mortgages. In addition, it offers cybersecurity services. The company was formerly known as Pacific & Western Bank of Canada and changed its name to VersaBank in May 2016. VersaBank was incorporated in 1979 and is headquartered in London, Canada.
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