Contrasting Bank First National (NASDAQ:BFC) and Bankwell Financial Group (NASDAQ:BWFG)

Bank First National (NASDAQ:BFC) and Bankwell Financial Group (NASDAQ:BWFG) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitability, valuation, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Bank First National and Bankwell Financial Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank First National	0	1	3	1	3.00
Bankwell Financial Group	0	2	2	0	2.50

Bank First National currently has a consensus target price of $150.00, indicating a potential downside of 1.00%. Bankwell Financial Group has a consensus target price of $52.00, indicating a potential upside of 3.17%. Given Bankwell Financial Group’s higher probable upside, analysts clearly believe Bankwell Financial Group is more favorable than Bank First National.

Insider and Institutional Ownership

30.0% of Bank First National shares are held by institutional investors. Comparatively, 35.8% of Bankwell Financial Group shares are held by institutional investors. 3.4% of Bank First National shares are held by company insiders. Comparatively, 19.5% of Bankwell Financial Group shares are held 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.

Dividends

Bank First National pays an annual dividend of $2.00 per share and has a dividend yield of 1.3%. Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.6%. Bank First National pays out 27.7% of its earnings in the form of a dividend. Bankwell Financial Group pays out 18.0% 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. Bank First National has increased its dividend for 10 consecutive years. Bankwell Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Bank First National and Bankwell Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank First National	29.31%	11.68%	1.66%
Bankwell Financial Group	16.94%	12.40%	1.09%

Risk and Volatility

Bank First National has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bank First National and Bankwell Financial Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank First National	$170.12 million	8.76	$71.50 million	$7.23	20.96
Bankwell Financial Group	$207.71 million	1.91	$35.20 million	$4.44	11.35

Bank First National has higher earnings, but lower revenue than Bankwell Financial Group. Bankwell Financial Group is trading at a lower price-to-earnings ratio than Bank First National, indicating that it is currently the more affordable of the two stocks.

Summary

Bank First National beats Bankwell Financial Group on 10 of the 18 factors compared between the two stocks.

About Bank First National

Bank First Corporation operates as a holding company for Bank First, N.A. that provides consumer and commercial financial services to businesses, professionals, consumers, associations, individuals, and governmental authorities in Wisconsin. It offers checking, savings, money market, cash management, retirement, and health savings accounts; other time deposits; certificates of deposit; and residential mortgage products. The company's loan products include real estate loans, including commercial real estate, residential mortgage, and home equity loans; commercial and industrial loans for working capital, accounts receivable, inventory financing, and other business purposes; construction and development loans; residential 1-4 family loans; and consumer loans for personal and household purposes, including secured and unsecured installment loans, and revolving lines of credit. It also provides credit cards; ATM processing; insurance; data processing and other information technology; investment and safekeeping; treasury management; and online, telephone, and mobile banking services. The company was formerly known as Bank First National Corporation and changed its name to Bank First Corporation in June 2019. Bank First Corporation was founded in 1894 and is headquartered in Manitowoc, Wisconsin.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.