Analyzing Northeast Community Bancorp (NASDAQ:NECB) & S&T Bancorp (NASDAQ:STBA)

S&T Bancorp (NASDAQ:STBA) and Northeast Community Bancorp (NASDAQ:NECB) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Dividends

S&T Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 3.0%. Northeast Community Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. S&T Bancorp pays out 39.4% of its earnings in the form of a dividend. Northeast Community Bancorp pays out 32.1% 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. S&T Bancorp has raised its dividend for 13 consecutive years and Northeast Community Bancorp has raised its dividend for 2 consecutive years. Northeast Community Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

65.2% of S&T Bancorp shares are held by institutional investors. Comparatively, 53.2% of Northeast Community Bancorp shares are held by institutional investors. 1.2% of S&T Bancorp shares are held by company insiders. Comparatively, 7.1% of Northeast Community Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares S&T Bancorp and Northeast Community Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
S&T Bancorp	24.51%	9.74%	1.42%
Northeast Community Bancorp	27.67%	12.00%	2.05%

Valuation & Earnings

This table compares S&T Bancorp and Northeast Community Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
S&T Bancorp	$415.61 million	4.14	$134.23 million	$3.76	12.98
Northeast Community Bancorp	$158.21 million	2.33	$44.41 million	$3.12	8.58

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for S&T Bancorp and Northeast Community Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
S&T Bancorp	0	6	2	0	2.25
Northeast Community Bancorp	0	2	1	1	2.75

S&T Bancorp presently has a consensus price target of $51.60, indicating a potential upside of 5.72%. Northeast Community Bancorp has a consensus price target of $29.50, indicating a potential upside of 10.16%. Given Northeast Community Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Northeast Community Bancorp is more favorable than S&T Bancorp.

Volatility & Risk

S&T Bancorp has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Northeast Community Bancorp has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500.

About S&T Bancorp

S&T Bancorp, Inc. is a bank holding company, which engages in the provision of consumer, commercial, and small business banking services. It operates through the following segments: Commercial Real Estate, Commercial and Industrial, Commercial Construction, Business Banking, Consumer Real Estate, and Other Consumer. The Commercial Real Estate segment includes both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. The Commercial and Industrial segment focuses on the companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. The Commercial Construction segment refers to the finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. The Business Banking segment is made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards. The Consumer Real Estate segment offers first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit. The Other Consumer segment consists of individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. The company was founded on March 17, 1983 and is headquartered in Indiana, PA.

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.