Ranking The Dividend Challengers, Part 4

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Includes: ANCX, BBT, BKSC, CFFI, CHCO, FISI, MNRK, PNBI, PPBN, SASR, SSB, UBSH, WSBC
by: Stan Stafford

Summary

Dividend Challengers are stocks that have 5+ years of increased dividends. It is part of the U.S. Dividend Champions list maintained by Dave Fish.

In this series of articles, I will be ranking the Dividend Challengers of various industry sectors based on 15 different metrics.

Out of this group of Mid-Atlantic Banks, my top ranked stocks include South State, Monarch Financial, and Pinnacle Bankshares.

While Monarch Financial was a top ranked stock, I feel that its pending merger limits its value as a long term dividend investment.

Overview

In this series of articles, I will be ranking the Dividend Challengers of various industry sectors based on 15 different metrics. Dividend Challengers are stocks that have 5+ years of consecutive dividend growth. The stocks are part of the U.S. Dividend Champions list that is maintained by Dave Fish.

For part 4 of this series, I will be reviewing the Dividend Challengers that are in the Banking industry with a focus on Mid-Atlantic Banks. These stocks include:

  • Access National (NASDAQ:ANCX)
  • Bank of South Carolina (NASDAQ:BKSC)
  • BB&T (NYSE:BBT)
  • C&F Financial (NASDAQ:CFFI)
  • City Holding (NASDAQ:CHCO)
  • Financial Institutions (NASDAQ:FISI)
  • Monarch Financial Holdings (NASDAQ:MNRK)
  • Pinnacle Bankshares (OTCQX:PPBN)
  • Pioneer Bankshares (OTCPK:PNBI)
  • Sandy Spring Bancorp (NASDAQ:SASR)
  • South State (NASDAQ:SSB)
  • Union Bankshares (NASDAQ:UBSH)
  • WesBanco (NASDAQ:WSBC)

These stocks will be ranked based on the following 15 metrics:

  • Dividend Yield
  • Dividend Growth (past five years)
  • Payout Ratio
  • Revenue Growth (past five years)
  • Earnings Growth (past five years)
  • Book Value Growth (past five years)
  • Stock Price Appreciation (past five years)
  • PEG ratio (trailing twelve months)
  • Price to Free Cash Flow ratio (trailing twelve months)
  • Return on Assets (trailing twelve months)
  • Return on Equity (trailing twelve months)
  • Return on Invested Capital (trailing twelve months)
  • Earnings Yield
  • Debt to Equity ratio (trailing twelve months)
  • Price to Book Value

Dividend Yield

Stock Value Ranking
Access National 2.89% 7
Bank of South Carolina 3.19% 3
BB&T 2.99% 6
C&F Financial 3.18% 4
City Holding 3.37% 1
Financial Institutions 2.82% 9
Monarch Financial Holdings 1.87% 11
Pinnacle Bankshares 1.82% 12
Pioneer Bankshares 3.21% 2
Sandy Spring Bancorp 3.17% 5
South State 1.45% 13
Union Bankshares 2.70% 10
WesBanco 2.87% 8
Click to enlarge

Dividend Growth

Stock Value Ranking
Access National 400.0% 1
Bank of South Carolina 43.00% 10
BB&T 68.75% 6
C&F Financial 28.00% 11
City Holding 26.47% 13
Financial Institutions 66.67% 7
Monarch Financial Holdings 48.50% 9
Pinnacle Bankshares 80.00% 4
Pioneer Bankshares 26.67% 12
Sandy Spring Bancorp 200.0% 2
South State 76.47% 5
Union Bankshares 171.4% 3
WesBanco 60.00% 8
Click to enlarge

Payout Ratio

Stock Value Ranking
Access National 63.99% 13
Bank of South Carolina 48.73% 11
BB&T 44.96% 9
C&F Financial 33.10% 4
City Holding 46.78% 10
Financial Institutions 44.89% 8
Monarch Financial Holdings 29.93% 2
Pinnacle Bankshares 41.88% 6
Pioneer Bankshares 31.31% 3
Sandy Spring Bancorp 49.38% 12
South State 23.84% 1
Union Bankshares 43.35% 7
WesBanco 40.87% 5
Click to enlarge

Revenue Growth

Stock Value Ranking
Access National 8.15% 11
Bank of South Carolina 60.10% 3
BB&T 11.14% 10
C&F Financial 11.61% 9
City Holding 26.52% 6
Financial Institutions 25.05% 7
Monarch Financial Holdings 46.72% 4
Pinnacle Bankshares 1.68% 13
Pioneer Bankshares 2.51% 12
Sandy Spring Bancorp 21.17% 8
South State 143.9% 1
Union Bankshares 68.89% 2
WesBanco 39.07% 5
Click to enlarge

Earnings Growth

Stock Value Ranking
Access National 63.23% 6
Bank of South Carolina 58.18% 7
BB&T 89.98% 4
C&F Financial 16.18% 13
City Holding 41.66% 10
Financial Institutions 23.18% 11
Monarch Financial Holdings 104.3% 2
Pinnacle Bankshares 100.2% 3
Pioneer Bankshares 14.96% 12
Sandy Spring Bancorp 55.78% 8
South State 468.5% 1
Union Bankshares 68.44% 5
WesBanco 49.08% 9
Click to enlarge

Book Value Growth

Stock Value Ranking
Access National 31.79% 8
Bank of South Carolina 22.37% 11
BB&T 41.82% 5
C&F Financial 36.41% 6
City Holding 34.76% 7
Financial Institutions 25.84% 10
Monarch Financial Holdings 62.86% 4
Pinnacle Bankshares 29.08% 9
Pioneer Bankshares 0.00% 13
Sandy Spring Bancorp 17.56% 12
South State 177.5% 1
Union Bankshares 136.1% 2
WesBanco 77.05% 3
Click to enlarge

Stock Price Appreciation

Stock Value Ranking
Access National 167.9% 2
Bank of South Carolina 66.28% 7
BB&T 38.17% 11
C&F Financial 91.89% 5
City Holding 45.14% 10
Financial Institutions 72.57% 6
Monarch Financial Holdings 200.2% 1
Pinnacle Bankshares 123.5% 3
Pioneer Bankshares 33.82% 12
Sandy Spring Bancorp 66.25% 8
South State 15.95% 13
Union Bankshares 118.9% 4
WesBanco 63.59% 9
Click to enlarge

PEG Ratio

Stock Value Ranking
Access National 2.67x 9
Bank of South Carolina 1.62x 8
BB&T 0.84x 4
C&F Financial 4.92x 13
City Holding 3.14x 12
Financial Institutions 3.00x 11
Monarch Financial Holdings 1.09x 5
Pinnacle Bankshares 0.55x 1
Pioneer Bankshares 1.25x 7
Sandy Spring Bancorp 0.78x 2
South State 0.81x 3
Union Bankshares 1.18x 6
WesBanco 2.69x 10
Click to enlarge

Price to Free Cash Flow Ratio

Stock Value Ranking
Access National 12.80x 9
Bank of South Carolina 11.52x 8
BB&T 8.72x 1.5
C&F Financial 9.82x 4
City Holding 16.93x 12
Financial Institutions 11.25x 7
Monarch Financial Holdings 57.59x 13
Pinnacle Bankshares 8.72x 1.5
Pioneer Bankshares 10.57x 5
Sandy Spring Bancorp 16.42x 11
South State 9.02x 3
Union Bankshares 10.62x 6
WesBanco 14.10x 10
Click to enlarge

Return on Assets

Stock Value Ranking
Access National 1.39% 2
Bank of South Carolina 1.29% 3
BB&T 1.05% 8
C&F Financial 0.91% 10
City Holding 1.52% 1
Financial Institutions 0.86% 12
Monarch Financial Holdings 1.18% 5
Pinnacle Bankshares 0.39% 13
Pioneer Bankshares 1.14% 6
Sandy Spring Bancorp 0.98% 9
South State 1.20% 4
Union Bankshares 0.90% 11
WesBanco 1.07% 7
Click to enlarge

Return on Equity

Stock Value Ranking
Access National 14.82% 1
Bank of South Carolina 12.80% 3
BB&T 8.92% 9
C&F Financial 9.88% 6
City Holding 13.23% 2
Financial Institutions 10.47% 5
Monarch Financial Holdings 11.94% 4
Pinnacle Bankshares 4.83% 13
Pioneer Bankshares 9.70% 7
Sandy Spring Bancorp 8.61% 10
South State 9.58% 8
Union Bankshares 6.91% 12
WesBanco 8.06% 11
Click to enlarge

Return on Invested Capital

Stock Value Ranking
Access National 6.62% 6
Bank of South Carolina 11.94% 1
BB&T 3.96% 12
C&F Financial 4.16% 11
City Holding 10.51% 2
Financial Institutions 4.80% 7
Monarch Financial Holdings 9.84% 3
Pinnacle Bankshares 4.51% 8
Pioneer Bankshares 6.64% 5
Sandy Spring Bancorp 3.87% 13
South State 9.10% 4
Union Bankshares 4.21% 9
WesBanco 4.19% 10
Click to enlarge

Earnings Yield

Stock Value Ranking
Access National 7.30% 3
Bank of South Carolina 6.05% 11
BB&T 7.10% 5
C&F Financial 9.42% 1
City Holding 7.02% 6
Financial Institutions 6.72% 9
Monarch Financial Holdings 6.99% 7
Pinnacle Bankshares 6.81% 8
Pioneer Bankshares 8.29% 2
Sandy Spring Bancorp 6.35% 10
South State 5.80% 12
Union Bankshares 5.68% 13
WesBanco 7.22% 4
Click to enlarge

Debt to Equity Ratio

Stock Value Ranking
Access National 1.34x 11
Bank of South Carolina 0.19x 4
BB&T 1.00x 8
C&F Financial 1.35x 12
City Holding 0.07x 3
Financial Institutions 1.13x 10
Monarch Financial Holdings 0.22x 5
Pinnacle Bankshares 0.03x 1
Pioneer Bankshares 0.51x 6
Sandy Spring Bancorp 1.37x 13
South State 0.05x 2
Union Bankshares 0.60x 7
WesBanco 1.10x 9
Click to enlarge

Price To Book Value

Stock Value Ranking
Access National 1.91x 12
Bank of South Carolina 2.00x 13
BB&T 1.12x 4
C&F Financial 1.03x 2
City Holding 1.79x 11
Financial Institutions 1.48x 8
Monarch Financial Holdings 1.76x 10
Pinnacle Bankshares 0.83x 1
Pioneer Bankshares 1.13x 5
Sandy Spring Bancorp 1.32x 7
South State 1.59x 9
Union Bankshares 1.20x 6
WesBanco 1.08x 3
Click to enlarge

Final Rankings

The Heavyweights

  • South State - Total Score of 80
  • Monarch Financial Holdings - Total Score of 85
  • Pinnacle Bankshares - Total Score of 96.5

The Middleweights

  • Access National - Total Score of 101
  • BB&T - Total Score of 102.5
  • Bank of South Carolina - Total Score of 103
  • Union Bankshares - Total Score of 103
  • City Holding - Total Score of 106

The Lightweights

  • Pioneer Bankshares - Total Score of 109
  • C&F Financial - Total Score of 111
  • WesBanco - Total Score of 111
  • Financial Institutions - Total Score of 127
  • Sandy Spring Bancorp - Total Score of 130

Conclusion

Out of this group of stocks, South State, Monarch Financial, and Pinnacle Bankshares are the three heavyweight stocks based on the metrics reviewed above.

South State had a strong recent quarter, beating both revenue and earnings estimates. Net income increased by 2.4%, revenue increased by 3.8%, and net loan growth increased by 10.7%. The company recently increased its quarterly dividend by 7.1% (the 9th consecutive quarter to see a dividend increase) and I believe with its current consolidation plans, South State will continue to provide solid returns for long term investors.

Monarch Financial also had a strong recent quarter with revenue increasing by 6.4% and an increase in earnings per share from $0.25 to $0.27 compared to the same period last year. However, due to the pending merger with TowneBank, I don't believe the stock is a strong candidate for long term investors. TowneBank recently missed revenue/earnings estimates in its latest quarter, and although the stock has performed well over the past year (up 26%), over the past 10 years the stock is down 1.50%.

Pinnacle Bankshares saw an 8.2% increase in revenue and an increase in earnings per share from $0.38 to $0.42 for its latest quarter compared to the same period last year. Both ROA and ROE increased for the Pinnacle during the quarter. While the dividend yield isn't that great, the growth of the dividend has been impressive, and it its current valuation I believe this a great low risk stock for dividend investors.

The Middleweight stocks in this industry sector are strong investment options as well. While these stocks will most likely not see strong capital appreciation, each of them offer solid dividend yields with current payout ratios that support future growth of those dividends.

While some of the Lightweight stocks do have positive attributes, such as Sandy Spring's impressive dividend yield and growth, I believe these stocks carry more risk with them that isn't worth it when comparing the favorable characteristics of most of the heavyweight and middleweight stocks reviewed above. As always, I suggest individual investors perform their own research before making any investment decision.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.