LINKBANCORP (NASDAQ:LNKB) & Bankwell Financial Group (NASDAQ:BWFG) Financial Contrast

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

Analyst Recommendations

This is a summary of recent ratings for Bankwell Financial Group and LINKBANCORP, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bankwell Financial Group	0	2	2	0	2.50
LINKBANCORP	0	2	1	1	2.75

Bankwell Financial Group currently has a consensus target price of $52.00, indicating a potential upside of 3.17%. LINKBANCORP has a consensus target price of $9.63, indicating a potential upside of 3.61%. Given LINKBANCORP’s stronger consensus rating and higher possible upside, analysts clearly believe LINKBANCORP is more favorable than Bankwell Financial Group.

Dividends

Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.6%. LINKBANCORP pays an annual dividend of $0.30 per share and has a dividend yield of 3.2%. Bankwell Financial Group pays out 18.0% of its earnings in the form of a dividend. LINKBANCORP pays out 33.3% 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.

Profitability

This table compares Bankwell Financial Group and LINKBANCORP’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bankwell Financial Group	16.94%	12.40%	1.09%
LINKBANCORP	17.97%	8.85%	0.90%

Volatility and Risk

Bankwell Financial Group has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, LINKBANCORP has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Earnings and Valuation

This table compares Bankwell Financial Group and LINKBANCORP”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bankwell Financial Group	$207.71 million	1.91	$35.20 million	$4.44	11.35
LINKBANCORP	$186.50 million	1.87	$33.51 million	$0.90	10.32

Bankwell Financial Group has higher revenue and earnings than LINKBANCORP. LINKBANCORP is trading at a lower price-to-earnings ratio than Bankwell Financial Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

35.8% of Bankwell Financial Group shares are owned by institutional investors. Comparatively, 37.5% of LINKBANCORP shares are owned by institutional investors. 19.5% of Bankwell Financial Group shares are owned by company insiders. Comparatively, 37.5% of LINKBANCORP shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Bankwell Financial Group beats LINKBANCORP on 10 of the 17 factors compared between the two stocks.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.

About LINKBANCORP

LINKBANCORP, Inc. operates as a bank holding company for The Gratz Bank, that provides various banking products and services to individuals, families, nonprofit, and business customers in Pennsylvania. Its deposit products include demand, saving, and money market accounts, as well as certificates of deposits. The company also offers commercial real estate, commercial business, commercial real estate construction, land development, residential real estate, home equity, consumer, agricultural, and municipal loans. It also provides online banking, mobile banking, direct and remote deposit, and cash management services. The company was incorporated in 2018 and is headquartered in Camp Hill, Pennsylvania.