LINKBANCORP (NASDAQ:LNKB) and Pathfinder Bancorp (NASDAQ:PBHC) Critical Review

LINKBANCORP (NASDAQ:LNKB) and Pathfinder Bancorp (NASDAQ:PBHC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for LINKBANCORP and Pathfinder Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LINKBANCORP	0	1	0	0	2.00
Pathfinder Bancorp	0	0	0	0	N/A

LINKBANCORP currently has a consensus price target of $7.00, suggesting a potential upside of 4.48%. Given LINKBANCORP’s higher possible upside, research analysts clearly believe LINKBANCORP is more favorable than Pathfinder Bancorp.

Valuation & Earnings

This table compares LINKBANCORP and Pathfinder Bancorp’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LINKBANCORP	$66.29 million	3.78	-$11.97 million	($0.51)	-13.14
Pathfinder Bancorp	$43.08 million	1.35	$9.29 million	$1.51	8.16

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

Insider & Institutional Ownership

37.5% of LINKBANCORP shares are held by institutional investors. Comparatively, 26.7% of Pathfinder Bancorp shares are held by institutional investors. 26.2% of LINKBANCORP shares are held by company insiders. Comparatively, 24.0% of Pathfinder Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

LINKBANCORP pays an annual dividend of $0.30 per share and has a dividend yield of 4.5%. Pathfinder Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 3.2%. LINKBANCORP pays out -58.8% of its earnings in the form of a dividend. Pathfinder Bancorp pays out 26.5% 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. Pathfinder Bancorp has raised its dividend for 1 consecutive years. LINKBANCORP is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares LINKBANCORP and Pathfinder Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LINKBANCORP	-18.34%	3.59%	0.38%
Pathfinder Bancorp	12.76%	8.05%	0.66%

Risk and Volatility

LINKBANCORP has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Pathfinder Bancorp has a beta of 0.15, meaning that its share price is 85% less volatile than the S&P 500.

Summary

LINKBANCORP beats Pathfinder Bancorp on 8 of the 15 factors compared between the two stocks.

About LINKBANCORP

LINKBANCORP, Inc. operates as a bank holding company for The Gratz Bank, that provides various banking products and services to individuals, families, nonprofit, and business customers in Pennsylvania. Its deposit products include demand, saving, and money market accounts, as well as certificates of deposits. The company also offers commercial real estate, commercial business, commercial real estate construction, land development, residential real estate, home equity, consumer, agricultural, and municipal loans. It also provides online banking, mobile banking, direct and remote deposit, and cash management services. The company was incorporated in 2018 and is headquartered in Camp Hill, Pennsylvania.

About Pathfinder Bancorp

Pathfinder Bancorp, Inc. operates as a bank holding company for Pathfinder Bank that provides various banking and financial products and services in New York. The company's deposit products include checking, savings, and money market deposit accounts; certificates of deposit; and demand and time deposits. Its loan portfolio comprises commercial real estate, commercial, residential real estate, construction, and tax-exempt loans; home equity loans and junior liens; and consumer loans comprising automobile, recreational vehicles, and unsecured personal loans, as well as unsecured lines of credit and loans secured by deposit accounts. The company is also involved in the property, casualty, and life insurance brokerage business. It primarily serves individuals, families, small to mid-size businesses, and municipalities. The company was founded in 1859 and is headquartered in Oswego, New York.