Financial Contrast: Penns Woods Bancorp (NASDAQ:PWOD) versus Bank of the James Financial Group (NASDAQ:BOTJ)

Bank of the James Financial Group (NASDAQ:BOTJ) and Penns Woods Bancorp (NASDAQ:PWOD) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, earnings, risk, analyst recommendations, institutional ownership, dividends and valuation.

Institutional and Insider Ownership

18.5% of Bank of the James Financial Group shares are owned by institutional investors. Comparatively, 27.9% of Penns Woods Bancorp shares are owned by institutional investors. 15.3% of Bank of the James Financial Group shares are owned by insiders. Comparatively, 4.0% of Penns Woods Bancorp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Bank of the James Financial Group and Penns Woods Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank of the James Financial Group	16.45%	15.86%	0.92%
Penns Woods Bancorp	14.79%	8.61%	0.72%

Risk and Volatility

Bank of the James Financial Group has a beta of 0.76, meaning that its stock price is 24% less volatile than the S&P 500. Comparatively, Penns Woods Bancorp has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Dividends

Bank of the James Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 2.9%. Penns Woods Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 5.5%. Bank of the James Financial Group pays out 20.5% of its earnings in the form of a dividend. Penns Woods Bancorp pays out 58.7% 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. Bank of the James Financial Group has increased its dividend for 5 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Bank of the James Financial Group and Penns Woods Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank of the James Financial Group	0	0	0	0	N/A
Penns Woods Bancorp	0	0	0	0	N/A

Valuation & Earnings

This table compares Bank of the James Financial Group and Penns Woods Bancorp’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank of the James Financial Group	$52.23 million	1.19	$8.70 million	$1.95	6.97
Penns Woods Bancorp	$99.97 million	1.74	$16.61 million	$2.18	10.61

Penns Woods Bancorp has higher revenue and earnings than Bank of the James Financial Group. Bank of the James Financial Group is trading at a lower price-to-earnings ratio than Penns Woods Bancorp, indicating that it is currently the more affordable of the two stocks.

About Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also provides loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it offers other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company provides mortgage banking; investment advisory services; securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1999 and is headquartered in Lynchburg, Virginia.

About Penns Woods Bancorp

Penns Woods Bancorp, Inc. operates as the bank holding company for Jersey Shore State Bank, which provides commercial and retail banking services to individuals, partnerships, non-profit organizations, and corporations. It accepts time, demand, and savings deposits, including super NOW accounts, statement savings accounts, money market accounts, and certificates of deposit, as well as checking and individual retirement account (IRAs) accounts. The company also offers loan products comprising residential, commercial, and construction real estate loans; agricultural loans for the purchase or improvement of real estate; commercial loans for the acquisition and improvement of real estate, purchase of equipment, and working capital purposes; letters of credit; consumer loans, such as construction and residential mortgages, home equity loans and lines, automobile financing, personal loans and lines of credit, and overdraft and check lines; and revolving credit loans with overdraft protection. In addition, it provides securities brokerage and financial planning services, which include the sale of life insurance products, annuities, and estate planning services; property and casualty, and auto insurance products; safe deposit services; ATM services; and Internet and telephone banking services. Further, the company engages in real estate transactions and investment activities. It operates through a network of offices located in Clinton, Lycoming, Centre, Montour, Union, Blair, and Luzerne Counties, Pennsylvania. Penns Woods Bancorp, Inc. was founded in 1934 and is headquartered in Williamsport, Pennsylvania.