BBX Capital (OTCMKTS:BBXTB) and Waterstone Financial (NASDAQ:WSBF) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for BBX Capital and Waterstone Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BBX Capital 0 0 0 0 N/A
Waterstone Financial 0 0 1 0 3.00

Waterstone Financial has a consensus target price of $19.50, indicating a potential upside of 56.00%. Given Waterstone Financial’s higher probable upside, analysts clearly believe Waterstone Financial is more favorable than BBX Capital.

Profitability

This table compares BBX Capital and Waterstone Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BBX Capital 1.85% 2.77% 0.99%
Waterstone Financial 16.62% 9.31% 1.81%

Institutional & Insider Ownership

61.2% of Waterstone Financial shares are owned by institutional investors. 88.2% of BBX Capital shares are owned by company insiders. Comparatively, 12.1% of Waterstone Financial 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.

Risk and Volatility

BBX Capital has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500. Comparatively, Waterstone Financial has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500.

Earnings & Valuation

This table compares BBX Capital and Waterstone Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BBX Capital $946.87 million 0.17 $17.69 million N/A N/A
Waterstone Financial $210.49 million 1.60 $35.90 million $1.37 9.12

Waterstone Financial has lower revenue, but higher earnings than BBX Capital.

Summary

Waterstone Financial beats BBX Capital on 9 of the 12 factors compared between the two stocks.

About BBX Capital

BBX Capital Corporation, formerly known as BFC Financial Corporation, is a private equity and venture capital firm specializing in investments and acquisitions of middle market companies. The firm also invests in mergers and acquisition, add-on acquisitions, divestiture, taking public companies private and private companies public, leveraged buyout, partnership, recapitalization, and restructuring. It typically does not invest in industries or companies whose ultimate returns are event driven. The firm seeks to invest across a broad range of industries ranging from service to manufacturing businesses. The firm prefers to acquire controlling interests in its portfolio companies and can also consider minority investments. BFC Financial Corporation was founded in 1980 and is based in Fort Lauderdale, Florida.

About Waterstone Financial

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates through two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, and money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposit, and individual retirement accounts, as well as certificates of deposit; lending solutions consisting of residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, and insurance products, as well as trust and investment management accounts. The Mortgage Banking segment provides residential mortgage loans for the purpose of sale in the secondary market. The company also provides transaction deposit, demand deposit, and non-interest bearing demand accounts, as well as time deposits; construction and land loans; and term loans for working capital, inventory, and general corporate use. In addition, it invests in a portfolio of securities, which include mortgage-backed securities, government-sponsored enterprise bonds, municipal obligations, and other debt securities. Waterstone Financial, Inc. operates 11 full-service banking offices, 1 drive-through office, and 11 automated teller machines located in Milwaukee, Washington, and Waukesha Counties, Wisconsin, as well as a loan production office in Minneapolis, Minnesota. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. Waterstone Financial, Inc. was founded in 1921 and is based in Wauwatosa, Wisconsin.

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