Flagstar Bancorp (NASDAQ: SAL) and Salisbury Bancorp (NASDAQ:SAL) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.

Earnings and Valuation

This table compares Flagstar Bancorp and Salisbury Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Flagstar Bancorp $997.00 million 1.91 $63.00 million $2.47 13.35
Salisbury Bancorp $43.76 million 2.72 $6.25 million $2.82 15.05

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

Profitability

This table compares Flagstar Bancorp and Salisbury Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flagstar Bancorp 7.31% 11.13% 0.92%
Salisbury Bancorp 14.63% 8.13% 0.78%

Dividends

Salisbury Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.6%. Flagstar Bancorp does not pay a dividend. Salisbury Bancorp pays out 39.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

93.9% of Flagstar Bancorp shares are owned by institutional investors. Comparatively, 9.0% of Salisbury Bancorp shares are owned by institutional investors. 62.9% of Flagstar Bancorp shares are owned by company insiders. Comparatively, 13.0% of Salisbury 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.

Analyst Ratings

This is a summary of current recommendations for Flagstar Bancorp and Salisbury Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flagstar Bancorp 0 1 9 0 2.90
Salisbury Bancorp 0 0 1 0 3.00

Flagstar Bancorp presently has a consensus target price of $40.71, suggesting a potential upside of 23.45%. Salisbury Bancorp has a consensus target price of $51.00, suggesting a potential upside of 20.14%. Given Flagstar Bancorp’s higher probable upside, equities research analysts clearly believe Flagstar Bancorp is more favorable than Salisbury Bancorp.

Volatility & Risk

Flagstar Bancorp has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500. Comparatively, Salisbury Bancorp has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Summary

Flagstar Bancorp beats Salisbury Bancorp on 10 of the 16 factors compared between the two stocks.

About Flagstar Bancorp

Flagstar Bancorp, Inc. operates as a savings and loan holding company for Flagstar Bank, FSB that provides commercial, small business, and consumer banking services to individuals and businesses in the United States. Its Community Banking segment offers various products, such as checking accounts, savings accounts, money market accounts, certificates of deposit, consumer and commercial loans, commercial real estate loans, equipment finance and leasing, home builder finance loans, and warehouse lines of credit. It also provides other financial services, including consumer and corporate card services, customized treasury management solutions, merchant services, and capital markets services, such as loan syndications, as well as wealth management products and services. This segment serves consumer, business, and mortgage lending customers through its branch banking, business and commercial banking, government banking, warehouse lending, and loans held-for-investment (LHFI) portfolio groups. The company's Mortgage Originations segment originates, acquires, and sells one-to-four family residential mortgage loans through home loan and national call centers, Internet and unaffiliated banks, mortgage banking, and brokerage companies. Its Mortgage Servicing segment offers services and subservices mortgage loans; and the servicing of residential mortgages for its LHFI portfolio, as well as noninterest-bearing escrow services. As of January 23, 2018, the company provided banking services through 99 branches in Michigan; and home loans through a wholesale network of brokers and correspondents in 50 states, as well as 89 retail locations in 29 states. Flagstar Bancorp, Inc. was founded in 1987 and is headquartered in Troy, Michigan.

About Salisbury Bancorp

Salisbury Bancorp, Inc. operates as the bank holding company for Salisbury Bank and Trust Company that provides commercial banking, consumer financing, retail banking, and trust and wealth advisory services. It offers various retail and commercial deposit products. The company also provides loans, such as residential and commercial real estate loans; construction loans; commercial loans; and consumer loans, including home equity loans and lines of credit, and auto and personal installment loans. In addition, it offers a range of fiduciary services, including trust and estate administration, wealth advisory, and investment management services to individuals, families, businesses, and institutions. Further, the company provides additional depositor related services consisting of landlord/tenant lease security accounts and services, merchant services, payroll services, ATM services, bank-by-phone services, Internet banking services, Internet bill pay services, person to person payments, bank to bank transfers, mobile banking services, and online financial management with account aggregation services, as well as cash management services, including remote deposit capture, ACH origination, wire transfers, and positive pay services. It operates through a network of 14 banking offices and 10 ATMs located in Litchfield County, Connecticut; Dutchess, Orange, and Ulster Counties, New York; and Berkshire County, Massachusetts, as well as through its main office located in Lakeville, Connecticut. Salisbury Bancorp, Inc. was founded in 1848 and is headquartered in Lakeville, Connecticut.

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