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

Dividends

Flushing Financial Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 2.5%. Northwest Bancshares pays an annual dividend of $0.64 per share and has a dividend yield of 3.9%. Flushing Financial Corporation pays out 42.1% of its earnings in the form of a dividend. Northwest Bancshares pays out 68.1% 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.

Valuation and Earnings

This table compares Flushing Financial Corporation and Northwest Bancshares’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Flushing Financial Corporation $278.53 million 2.93 $64.91 million $1.71 16.58
Northwest Bancshares $430.99 million 3.91 $49.66 million $0.94 17.46

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

Risk and Volatility

Flushing Financial Corporation has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500. Comparatively, Northwest Bancshares has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Flushing Financial Corporation and Northwest Bancshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flushing Financial Corporation 0 2 1 0 2.33
Northwest Bancshares 1 3 0 0 1.75

Flushing Financial Corporation currently has a consensus target price of $29.00, suggesting a potential upside of 2.29%. Northwest Bancshares has a consensus target price of $17.00, suggesting a potential upside of 3.60%. Given Northwest Bancshares’ higher probable upside, analysts clearly believe Northwest Bancshares is more favorable than Flushing Financial Corporation.

Profitability

This table compares Flushing Financial Corporation and Northwest Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flushing Financial Corporation 19.50% 9.04% 0.77%
Northwest Bancshares 20.59% 7.54% 0.94%

Insider & Institutional Ownership

77.0% of Flushing Financial Corporation shares are owned by institutional investors. Comparatively, 64.0% of Northwest Bancshares shares are owned by institutional investors. 4.9% of Flushing Financial Corporation shares are owned by company insiders. Comparatively, 2.0% of Northwest Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Flushing Financial Corporation beats Northwest Bancshares on 9 of the 16 factors compared between the two stocks.

Flushing Financial Corporation Company Profile

Flushing Financial Corporation is the bank holding company for Flushing Bank (the Bank). The Company is a community-oriented financial institution offering a range of financial services. The Bank’s subsidiaries include Flushing Preferred Funding Corporation, Flushing Service Corporation and FSB Properties Inc. The Company also owns Flushing Financial Capital Trust II, Flushing Financial Capital Trust III and Flushing Financial Capital Trust IV (the Trusts). As of December 31, 2016, the Bank operated 19 full-service offices, which were located in the New York City Boroughs of Queens, Brooklyn, and Manhattan, and in Nassau County, New York. The Company also operates an Internet branch, iGObanking.com. The Bank has a business banking unit, which focuses on the development of a full complement of commercial business deposit, loan and cash management products.

Northwest Bancshares Company Profile

Northwest Bancshares, Inc. (Northwest) is a savings and loan holding company. The Company’s principal business consists of attracting deposits and making loans secured by various types of collateral, including real estate and other assets in the markets in which it operates. Its segments include Community Banking and Consumer Finance. The Community Banking segment includes its savings bank subsidiary, Northwest Bank, as well as the subsidiaries of the savings bank that provide similar products and services. The bank is a community-oriented institution that offers a range of personal and business deposit and loan products, including mortgage, consumer, and commercial loans, as well as trust, investment management, actuarial and benefit plan administration, and brokerage services typically offered by a full service financial institution. The Consumer Finance segment comprises Northwest Consumer Discount Company, a subsidiary of Northwest Bank.

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