Head-To-Head Review: Camden National (NASDAQ:CAC) vs. Arrow Financial (NASDAQ:AROW)

Arrow Financial (NASDAQ:AROW) and Camden National (NASDAQ:CAC) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arrow Financial	13.32%	8.59%	0.76%
Camden National	18.02%	10.38%	0.93%

Dividends

Arrow Financial pays an annual dividend of $1.12 per share and has a dividend yield of 4.1%. Camden National pays an annual dividend of $1.68 per share and has a dividend yield of 3.7%. Arrow Financial pays out 63.3% of its earnings in the form of a dividend. Camden National pays out 46.4% 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.

Earnings and Valuation

This table compares Arrow Financial and Camden National”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arrow Financial	$223.07 million	2.04	$29.71 million	$1.77	15.34
Camden National	$294.10 million	2.25	$53.00 million	$3.62	12.53

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

Volatility and Risk

Arrow Financial has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Camden National has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.

Institutional & Insider Ownership

46.7% of Arrow Financial shares are owned by institutional investors. Comparatively, 77.4% of Camden National shares are owned by institutional investors. 3.6% of Arrow Financial shares are owned by insiders. Comparatively, 1.9% of Camden National shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Arrow Financial and Camden National, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arrow Financial	0	2	0	0	2.00
Camden National	0	2	1	0	2.33

Arrow Financial presently has a consensus target price of $31.00, indicating a potential upside of 14.20%. Camden National has a consensus target price of $48.33, indicating a potential upside of 6.57%. Given Arrow Financial’s higher possible upside, research analysts clearly believe Arrow Financial is more favorable than Camden National.

Summary

Camden National beats Arrow Financial on 12 of the 16 factors compared between the two stocks.

About Arrow Financial

Arrow Financial Corporation, a bank holding company, provides commercial and consumer banking, and financial products and services. The company’s deposit products include demand deposits, interest-bearing checking accounts, savings deposits, time deposits, and other time deposits. Its lending activities comprise commercial loans, such as term loans, time notes, and lines of credit; and commercial real estate loans to finance real estate purchases, refinancing, expansions, and enhancement to commercial properties, as well as commercial construction and land development loans to finance projects. The company’s lending activities also include consumer installment loans to finance personal expenditures, personal lines of credit, overdraft protection, and automobile loans; and residential real estate loans, fixed home equity loans, and home equity lines of credit for consumers to finance home improvements, debt consolidation, education, and other uses. In addition, it maintains an indirect lending program. Further, the company provides retirement planning, trust, and estate administration services for individuals, as well as pension, profit-sharing, and employee benefit plan administration services for corporations. Additionally, it offers insurance agency services comprising group health care policies and life insurance, and property and casualty insurance products; and investment advisory services to its proprietary mutual funds, as well as holds a real estate investment trust. It operates in the northeastern region of New York State in Warren, Washington, Saratoga, Essex, Clinton, Rensselaer, Albany, and Schenectady counties. Arrow Financial Corporation was founded in 1851 and is headquartered in Glens Falls, New York.

About Camden National

Camden National Corporation operates as the bank holding company for Camden National Bank that provides various commercial and consumer banking products and services for consumer, institutional, municipal, non-profit, and commercial customers in Maine, New Hampshire, and Massachusetts. The company accepts checking, savings, time, and brokered deposits, as well as deposits with the certificate of deposit account registry system. Its loan products include non-owner-occupied commercial estate loans, owner-occupied commercial real estate loans, unsecured fully-guaranteed commercial loans backed by the small business administration, loans secured by one-to four-family properties, and consumer and home equity loans. The company also provides brokerage and insurance services through its financial offerings consisting of college, retirement, estate planning, mutual funds, strategic asset management accounts, and variable and fixed annuities. Further, it offers a range of fiduciary and asset management, wealth management, investment management, financial planning, and trustee services. Camden National Corporation was founded in 1875 and is headquartered in Camden, Maine.