FFBW (NASDAQ:FFBW) and Northfield Bancorp (NASDAQ:NFBK) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.
Volatility and Risk
FFBW has a beta of 0.5, indicating that its stock price is 50% less volatile than the SP 500. Comparatively, Northfield Bancorp has a beta of 0.57, indicating that its stock price is 43% less volatile than the SP 500.
Northfield Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.7%. FFBW does not pay a dividend. Northfield Bancorp pays out 52.6% of its earnings in the form of a dividend. Northfield Bancorp has increased its dividend for 6 consecutive years.
Northfield Bancorp has a consensus price target of $16.50, suggesting a potential upside of 11.04%. Given Northfield Bancorp’s higher probable upside, analysts clearly believe Northfield Bancorp is more favorable than FFBW.
Insider Institutional Ownership
4.2% of FFBW shares are held by institutional investors. Comparatively, 56.4% of Northfield Bancorp shares are held by institutional investors. 1.6% of FFBW shares are held by insiders. Comparatively, 9.2% of Northfield Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Valuation and Earnings
FFBW, Inc. is the holding company of First Federal Bank of Wisconsin (the Bank). First Federal Bank of Wisconsin is a federally chartered mutual savings bank. The Bank’s business consists primarily of taking deposits from the general public and investing those deposits, together with funds generated from operations, in one-to four-family residential owner-occupied real estate loans, one-to four-family residential investor-owned real estate loans, multifamily loans and commercial real estate loans, and, to a lesser extent, commercial and industrial loans, commercial development loans and consumer loans. The Bank invests in various types of liquid assets, including the United States Treasury obligations, securities of various government-sponsored enterprises and municipal governments, deposits at the Federal Home Loan Bank of Chicago. At March 31, 2017, the Bank had total deposits of 180.5 million. At March 31, 2017, the Bank had net loans of 165,697 thousand.
Northfield Bancorp, Inc. operates as the bank holding company for Northfield Bank that provides various banking products and services primarily to individuals and corporate customers. It accepts various deposits products, including transaction accounts comprising negotiable orders of withdrawal accounts and non-interest bearing checking accounts; savings accounts, such as money market, passbook, and statement savings; certificates of deposit consisting of individual retirement accounts; and brokered deposits. The company also offers various loans comprising multifamily and other commercial real estate loans, construction and land loans, commercial and industrial loans, one-to-four family residential real estate loans, and home equity loans and lines of credit. In addition, it purchases various investment securities, such as mortgage-backed securities and corporate bonds; and deposits funds in other financial institutions, as well as holds primarily mortgage loans and other investments. The company operates through its home office located in Staten Island, New York; operations center located in Woodbridge, New Jersey; 38 additional branch offices located in New York and New Jersey; and a lending office located in Brooklyn, New York. Northfield Bancorp, Inc. was founded in 1887 and is based in Woodbridge, New Jersey.
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