Financial Comparison of Community Bank System and U.S. Bancorp

The financial landscape includes various companies, and two prominent names in this sector are Community Bank System (NYSE:CBU) and U.S. Bancorp (NYSE:USB). In this article, we will compare these two financial institutions based on their profitability, institutional ownership, risk factors, analyst ratings, and dividend performance to determine which might be a better investment option.

Profitability

When assessing profitability, it is essential to look at net margins, return on equity, and return on assets. The following table encapsulates these metrics:

	Net Margins	Return on Equity	Return on Assets
Community Bank System	19.40%	10.94%	1.17%
U.S. Bancorp	14.75%	12.94%	0.97%

Community Bank System shows higher net margins but U.S. Bancorp has a better return on equity, which could indicate efficiency in using shareholder funds.

Institutional & Insider Ownership

Examining ownership structures provides insights into investor confidence. Community Bank System has 73.8% of its shares held by institutional investors, while U.S. Bancorp has a slightly higher figure at 77.6%. In terms of insider ownership, 1.9% of Community Bank System shares are held by insiders compared to just 0.2% for U.S. Bancorp. High institutional ownership often reflects that experienced investors believe in the company's growth potential.

Risk and Volatility

When considering investment risks, beta values are important. The beta for Community Bank System is 0.67, meaning it is 33% less volatile than the S&P 500. In contrast, U.S. Bancorp has a beta of 1.04, making it 4% more volatile than the market index. This indicates that Community Bank System may be a safer investment in terms of price fluctuations.

Analyst Ratings

According to current ratings from analysts available through MarketBeat.com, we see a breakdown of recommendations for both companies:

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Bank System	0	3	0	1	2.50
U.S. Bancorp	0	9	11	0	2.55

The consensus target price for Community Bank System is $65.75, suggesting a minor downside potential of 1.89%. On the other hand, U.S. Bancorp has a target price of $54.21, which points to a potential upside of 13.86%. This indicates a more favorable outlook for U.S. Bancorp by analysts.

Dividends

Regarding dividend payments, Community Bank System offers an annual dividend of $1.84 per share with a yield of 2.7%. U.S. Bancorp provides a higher annual dividend of $2.00 per share and a better yield of 4.2%. Community Bank System distributes 53.5% of its earnings as dividends, whereas U.S. Bancorp has a slightly lower payout ratio of 52.8%. Both companies have a strong history in increasing their dividends, with Community Bank System raising it for 21 consecutive years, compared to 15 years for U.S. Bancorp. Overall, U.S. Bancorp emerges as the superior dividend stock with a higher yield and lower payout ratio.

Earnings and Valuation

Examining revenue and earnings gives further clarity:

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Bank System	$940.71 million	3.74	$182.48 million	$3.44	19.48
U.S. Bancorp	$42.71 billion	1.74	$6.30 billion	$3.79	12.56

U.S. Bancorp significantly outperforms Community Bank System in revenue and net income. Moreover, its lower price-to-earnings ratio suggests that it might be a more economically attractive stock for investors.

Summary

In summary, U.S. Bancorp excels in 11 out of the 18 comparison criteria used between the two financial institutions. This makes U.S. Bancorp a potentially better investment choice based on the metrics analyzed.

About Community Bank System

Community Bank System, Inc. is a bank holding company for Community Bank, N.A., providing banking and financial services to various clients, including retail and commercial customers. Established in 1866, its headquarters is located in DeWitt, New York. The company offers a wide range of products, including deposit accounts, loans, insurance, investment management services, and employee benefit services.

About U.S. Bancorp

U.S. Bancorp is a financial services holding company that serves a diverse clientele, including individuals, businesses, and government entities. Founded in 1863 and headquartered in Minneapolis, Minnesota, the company provides various services ranging from traditional banking to investment and insurance products.

investment, finance, comparison