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

Analyst Ratings

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

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

Northwest Bancshares presently has a consensus target price of $17.00, indicating a potential upside of 4.74%. Flushing Financial Corporation has a consensus target price of $29.00, indicating a potential upside of 4.50%. Given Northwest Bancshares’ higher probable upside, analysts plainly believe Northwest Bancshares is more favorable than Flushing Financial Corporation.

Volatility and Risk

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

Earnings and Valuation

This table compares Northwest Bancshares and Flushing Financial Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Northwest Bancshares $430.99 million 3.86 $49.66 million $0.95 17.08
Flushing Financial Corporation $278.53 million 2.87 $64.91 million $1.71 16.23

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.

Insider and Institutional Ownership

64.0% of Northwest Bancshares shares are owned by institutional investors. Comparatively, 77.0% of Flushing Financial Corporation shares are owned by institutional investors. 2.0% of Northwest Bancshares shares are owned by company insiders. Comparatively, 4.9% of Flushing Financial Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

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

Dividends

Northwest Bancshares pays an annual dividend of $0.64 per share and has a dividend yield of 3.9%. Flushing Financial Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 2.6%. Northwest Bancshares pays out 67.4% of its earnings in the form of a dividend. Flushing Financial Corporation pays out 42.1% 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.

Summary

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

About Northwest Bancshares

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.

About Flushing Financial Corporation

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.

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