Northwest Bancshares (NASDAQ: TBBK) and Bancorp (NASDAQ:TBBK) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.

Profitability

This table compares Northwest Bancshares and Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northwest Bancshares 21.20% 8.06% 1.03%
Bancorp 6.61% 9.81% 0.75%

Volatility & Risk

Northwest Bancshares has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Bancorp has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Valuation and Earnings

This table compares Northwest Bancshares and Bancorp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northwest Bancshares $469.34 million 4.03 $94.46 million $0.84 21.83
Bancorp $213.56 million 2.54 $21.67 million $0.51 18.86

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

Insider and Institutional Ownership

68.6% of Northwest Bancshares shares are owned by institutional investors. Comparatively, 79.6% of Bancorp shares are owned by institutional investors. 2.2% of Northwest Bancshares shares are owned by company insiders. Comparatively, 11.1% of Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Northwest Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 3.7%. Bancorp does not pay a dividend. Northwest Bancshares pays out 81.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Northwest Bancshares has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Northwest Bancshares and Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northwest Bancshares 0 2 0 0 2.00
Bancorp 0 2 0 1 2.67

Northwest Bancshares currently has a consensus target price of $17.00, indicating a potential downside of 7.31%. Bancorp has a consensus target price of $11.00, indicating a potential upside of 14.35%. Given Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Bancorp is more favorable than Northwest Bancshares.

Summary

Northwest Bancshares beats Bancorp on 9 of the 17 factors compared between the two stocks.

Northwest Bancshares Company Profile

Northwest Bancshares, Inc. operates as a bank holding company for Northwest Savings Bank that offers various personal and business banking solutions in the United States. The company offers personal and business deposits, such as checking, savings, money market deposit, term certificate, and individual retirement accounts. Its loan portfolio comprise one-to-four family residential real estate, residential mortgage, short term consumer, multi-family residential and commercial real estate, commercial business, and home equity loans; lines of credit; and consumer loans, including automobile, sales finance, unsecured personal, and credit card loans, as well as loans secured by deposit accounts. In addition, the company offers employee benefit, property, and casualty insurance services; and trust, investment management, and brokerage services. As of December 31, 2017, it operated 172 community-banking locations in central and western Pennsylvania, western New York, and eastern Ohio. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Warren, Pennsylvania.

Bancorp Company Profile

The Bancorp, Inc. operates as the financial holding company for The Bancorp Bank that provides banking products and services in the United States. The company offers a range of deposit products and services, including checking accounts, savings accounts, money market accounts, commercial accounts, and prepaid and debit cards. It also provides securities backed lines of credit, vehicle fleet and other equipment leasing, small business administration loans, and loans generated for sale into capital markets primarily through commercial mortgage backed securities. In addition, it offers private label banking; credit and debit card payment processing for independent service organizations; institutional banking; and Internet banking services. The Bancorp, Inc. was founded in 1999 and is based in Wilmington, Delaware.

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