Broadway Financial (NASDAQ:BYFC) versus Northpointe Bancshares (NYSE:NPB) Critical Survey

Northpointe Bancshares (NYSE:NPB) and Broadway Financial (NASDAQ:BYFC) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Earnings and Valuation

This table compares Northpointe Bancshares and Broadway Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northpointe Bancshares	$390.45 million	1.65	$55.16 million	$1.57	11.96
Broadway Financial	$63.76 million	1.18	$1.93 million	($0.13)	-62.85

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

Insider and Institutional Ownership

12.1% of Broadway Financial shares are owned by institutional investors. 18.4% of Northpointe Bancshares shares are owned by company insiders. Comparatively, 4.1% of Broadway Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Northpointe Bancshares and Broadway Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northpointe Bancshares	1	1	2	0	2.25
Broadway Financial	1	0	0	0	1.00

Northpointe Bancshares currently has a consensus price target of $19.08, indicating a potential upside of 1.59%. Given Northpointe Bancshares’ stronger consensus rating and higher probable upside, analysts clearly believe Northpointe Bancshares is more favorable than Broadway Financial.

Profitability

This table compares Northpointe Bancshares and Broadway Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northpointe Bancshares	16.09%	12.43%	1.16%
Broadway Financial	3.18%	1.46%	0.15%

Summary

Northpointe Bancshares beats Broadway Financial on 12 of the 13 factors compared between the two stocks.

About Northpointe Bancshares

Northpointe Bancshares, Inc. operates as a bank holding company. It offers a nationwide mortgage purchase program, residential mortgage loans, digital deposit banking to retail customers and custodial deposit services. The company was founded by Charles A. Williams in 1998 and is headquartered in Grand Rapids, MI.

About Broadway Financial

Broadway Financial Corporation operates as the holding company for City First Bank, National Association that provides various banking products and services in the United States. It accepts various deposit accounts, including savings accounts, checking accounts, interest checking accounts, money market accounts, and fixed-term certificates of deposit. The company also offers mortgage loans, which are secured by multi-family residential properties; single family residential properties; and commercial real estate, including charter schools, community facilities, and churches, as well as commercial business, construction, and consumer loans. In addition, it invests in securities issued by federal government agencies, residential mortgage-backed securities, and other investments. The company was founded in 1946 and is headquartered in Los Angeles, California.