Contrasting Northeast Community Bancorp (NASDAQ:NECB) and First Commonwealth Financial (NYSE:FCF)

Northeast Community Bancorp (NASDAQ:NECB) and First Commonwealth Financial (NYSE:FCF) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, analyst recommendations, risk and dividends.

Dividends

Northeast Community Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 3.0%. First Commonwealth Financial pays an annual dividend of $0.56 per share and has a dividend yield of 2.8%. Northeast Community Bancorp pays out 24.8% of its earnings in the form of a dividend. First Commonwealth Financial pays out 37.1% 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. Northeast Community Bancorp has raised its dividend for 2 consecutive years and First Commonwealth Financial has raised its dividend for 9 consecutive years. Northeast Community Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

53.3% of Northeast Community Bancorp shares are held by institutional investors. Comparatively, 72.6% of First Commonwealth Financial shares are held by institutional investors. 7.1% of Northeast Community Bancorp shares are held by company insiders. Comparatively, 1.9% of First Commonwealth Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Northeast Community Bancorp has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500. Comparatively, First Commonwealth Financial has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.

Valuation and Earnings

This table compares Northeast Community Bancorp and First Commonwealth Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Community Bancorp	$158.21 million	2.31	$44.41 million	$3.22	8.20
First Commonwealth Financial	$729.51 million	2.77	$152.30 million	$1.51	13.17

First Commonwealth Financial has higher revenue and earnings than Northeast Community Bancorp. Northeast Community Bancorp is trading at a lower price-to-earnings ratio than First Commonwealth Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Northeast Community Bancorp and First Commonwealth Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northeast Community Bancorp	28.16%	12.62%	2.16%
First Commonwealth Financial	21.19%	10.56%	1.32%

Analyst Recommendations

This is a summary of current recommendations and price targets for Northeast Community Bancorp and First Commonwealth Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northeast Community Bancorp	0	1	1	1	3.00
First Commonwealth Financial	0	3	3	0	2.50

First Commonwealth Financial has a consensus price target of $20.33, indicating a potential upside of 2.25%. Given First Commonwealth Financial’s higher probable upside, analysts clearly believe First Commonwealth Financial is more favorable than Northeast Community Bancorp.

About Northeast Community Bancorp

Northeast Community Bancorp, Inc. operates as the holding company for NorthEast Community Bank that provides financial services for individuals and businesses. It accepts various deposit instruments, including checking accounts, money market accounts, regular savings accounts, and non-interest bearing demand accounts, as well as certificates of deposits. The company also offers construction, commercial and industrial, multifamily and mixed-use real estate, non-residential real estate loans, and consumer loans. In addition, it invests in various types of liquid assets, including U.S. Treasury obligations, municipal securities, deposits at the Federal Home Loan Bank of New York, and certificates of deposit of federally insured institutions, as well as securities of various federal agencies, and of state and municipal governments. Further, the company offers financial planning and investment advisory services; and life insurance products and fixed-rate annuities. It operates full-service branches located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts; and loan production offices located in White Plains, New York, and New City counties in New York and Danvers, Massachusetts. Northeast Community Bancorp, Inc. was founded in 1934 and is headquartered in White Plains, New York.

About First Commonwealth Financial

First Commonwealth Financial Corporation, a financial holding company, provides various consumer and commercial banking services in the United States. Its consumer services include personal checking accounts, interest-earning checking accounts, savings and health savings accounts, insured money market accounts, debit cards, investment certificates, fixed and variable rate certificates of deposit, mortgage loans, secured and unsecured installment loans, construction and real estate loans, safe deposit facilities, credit cards, credit lines with overdraft checking protection, IRA accounts, and automated teller machine (atm) services, as well as internet, mobile, and telephone banking services. The company's commercial banking services comprise commercial lending, business checking accounts, online account management services, payroll direct deposits, commercial cash management services, and repurchase agreements, as well as ACH origination services. In addition, it offers various trust and asset management services; auto, home, and business insurance, as well as term life insurance; and annuities, mutual funds, and stock and bond brokerage services through a broker-dealer and insurance brokers. The company was founded in 1934 and is headquartered in Indiana, Pennsylvania.