Comparing Harleysville Financial (OTCMKTS:HARL) and Virginia National Bankshares (NASDAQ:VABK)

Virginia National Bankshares (NASDAQ:VABK) and Harleysville Financial (OTCMKTS:HARL) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, risk, earnings and institutional ownership.

Institutional & Insider Ownership

37.4% of Virginia National Bankshares shares are owned by institutional investors. Comparatively, 1.2% of Harleysville Financial shares are owned by institutional investors. 13.9% of Virginia National Bankshares shares are owned by insiders. Comparatively, 14.5% of Harleysville Financial 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.

Dividends

Virginia National Bankshares pays an annual dividend of $1.32 per share and has a dividend yield of 3.2%. Harleysville Financial pays an annual dividend of $1.24 per share and has a dividend yield of 5.6%. Virginia National Bankshares pays out 45.7% of its earnings in the form of a dividend. Harleysville Financial pays out 43.5% 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. Harleysville Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current ratings for Virginia National Bankshares and Harleysville Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Virginia National Bankshares	0	0	0	0	N/A
Harleysville Financial	0	0	0	0	N/A

Profitability

This table compares Virginia National Bankshares and Harleysville Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Virginia National Bankshares	18.95%	10.16%	0.97%
Harleysville Financial	25.16%	11.50%	1.15%

Valuation and Earnings

This table compares Virginia National Bankshares and Harleysville Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Virginia National Bankshares	$79.09 million	2.76	$19.26 million	$2.89	14.06
Harleysville Financial	$36.54 million	2.20	$12.22 million	$2.85	7.79

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

Volatility & Risk

Virginia National Bankshares has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, Harleysville Financial has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Summary

Virginia National Bankshares beats Harleysville Financial on 7 of the 13 factors compared between the two stocks.

About Virginia National Bankshares

Virginia National Bankshares Corporation operates as the holding company for Virginia National Bank that provides a range of commercial and retail banking services. The company operates through Bank, Sturman Wealth Advisors, VNB Trust and Estate Services, and Masonry Capital segments. It provides checking accounts, demand deposits, NOW accounts, money market deposit accounts, time deposits, certificates of deposit, individual retirement accounts, and other depository services. In addition, the company offers commercial and industrial loans, real estate construction and land loans, commercial real estate loans, and 1-4 family residential mortgages, as well as consumer loans comprising student loans, revolving credit, and other fixed payment loans. Further, it provides automated teller machines, internet banking, treasury, and cash management services; merchant and debit card services; and wealth and investment advisory, and brokerage services. Additionally, the company offers investment management, corporate trustee, trust and estate administration, IRA administration, house investment management, and custody services. It serves individuals, businesses, and charitable organizations in the Charlottesville/Albemarle County, Fauquier County, Manassas, Prince William County, Richmond, and Winchester market areas in Virginia. Virginia National Bankshares Corporation was founded in 1998 and is headquartered in Charlottesville, Virginia.

About Harleysville Financial

Harleysville Financial Corporation operates as the bank holding company for Harleysville Bank that provides various banking products and services in Pennsylvania. The company offers various deposit products, including savings, money market, and checking accounts, as well as certificates of deposits. It also provides consumer loans, including residential mortgages, savings account loans, and home equity line of credit, construction, and non-real estate consumer loans; and commercial loans, such as commercial mortgages, line of credit, and commercial business loans. In addition, the company offers online banking and bill payment, mobile and telephone banking, remote deposit, debit cards, automated clearing house processing, sweep accounts, zero balance accounts, employee services, and other cash management services. Further, it provides investment services, such as financial consultation, cash and wealth management, education planning, investment strategy, insurance, retirement and estate planning, financial and goal planning, and asset allocation services, as well as offers investment products, such as fixed and variable annuities, mutual funds, life insurances, stocks and bonds, tax-advantaged investments, long-term care insurances, disability insurances, retirement plans/individual retirement accounts, wrap accounts, and unit investment trusts. Its primary market area includes Montgomery County and Bucks County. The company was formerly known as Harleysville Savings Financial Corporation and changed its name to Harleysville Financial Corporation in May 2017. Harleysville Financial Corporation was founded in 1915 and is headquartered in Harleysville, Pennsylvania.