Critical Comparison: Sturgis Bancorp (OTCMKTS:STBI) versus Lyons Bancorp (OTCMKTS:LYBC)

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

Dividends

Sturgis Bancorp pays an annual dividend of $0.68 per share and has a dividend yield of 3.9%. Lyons Bancorp pays an annual dividend of $1.60 per share and has a dividend yield of 4.0%. Sturgis Bancorp pays out 283.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Lyons Bancorp pays out 36.0% of its earnings in the form of a dividend. Lyons Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Sturgis Bancorp has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Lyons Bancorp has a beta of -0.07, suggesting that its stock price is 107% less volatile than the S&P 500.

Earnings & Valuation

This table compares Sturgis Bancorp and Lyons Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sturgis Bancorp	$49.68 million	0.75	$6.02 million	$0.24	71.88
Lyons Bancorp	$70.28 million	1.94	$17.35 million	$4.45	9.10

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

Profitability

This table compares Sturgis Bancorp and Lyons Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sturgis Bancorp	0.94%	N/A	N/A
Lyons Bancorp	N/A	N/A	N/A

Analyst Ratings

This is a breakdown of current recommendations and price targets for Sturgis Bancorp and Lyons Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sturgis Bancorp	0	0	0	0	N/A
Lyons Bancorp	0	0	0	0	N/A

Insider & Institutional Ownership

0.3% of Lyons Bancorp shares are owned by institutional investors. 16.0% of Sturgis Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Lyons Bancorp beats Sturgis Bancorp on 7 of the 11 factors compared between the two stocks.

About Sturgis Bancorp

Sturgis Bancorp, Inc. operates as the bank holding company for Sturgis Bank & Trust Company that provides banking products and services in Michigan, the United States. The company offers checking, savings and health savings, and money market accounts; and certificates of deposit and individual retirement accounts. It also provides mortgage, automobile, savings secured, personal, home equity, equipment and machinery, government supported, and commercial real estate loans, as well as home equity lines of credit and business lines of credit; and credit cards. In addition, the company offers private banking, cashier checks, wire transfers, foreign drafts and foreign currency, overdraft protection, night depository, and notary services, as well as safe deposit boxes and residential mortgages. Further, it provides direct deposit, remote deposit capture, Visa check card, and checks reorder services; and investment and financial-advisory services, as well as commercial and consumer insurance and title insurance products. Additionally, the company offers estate and asset management services, such as estate settlements, trust administration, record keeping, investment management, and custody services; cash and treasury management; and online and mobile banking, bill pay, and mobile wallet services. It operates through 14 bank facilities and 4 full service standalone ATMs located in 12 communities in Michigan. Sturgis Bancorp, Inc. was founded in 1905 and is headquartered in Sturgis, Michigan.

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.