Finward Bancorp (NASDAQ:FNWD) and HDFC Bank (NYSE:HDB) Financial Review

HDFC Bank (NYSE:HDB) and Finward Bancorp (NASDAQ:FNWD) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Risk and Volatility

HDFC Bank has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Finward Bancorp has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500.

Dividends

HDFC Bank pays an annual dividend of $0.35 per share and has a dividend yield of 1.5%. Finward Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. HDFC Bank pays out 20.6% of its earnings in the form of a dividend. Finward Bancorp pays out 21.1% 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. HDFC Bank is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent recommendations and price targets for HDFC Bank and Finward Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HDFC Bank	0	2	0	0	2.00
Finward Bancorp	0	1	2	0	2.67

Finward Bancorp has a consensus price target of $41.00, suggesting a potential downside of 9.43%. Given Finward Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Finward Bancorp is more favorable than HDFC Bank.

Earnings and Valuation

This table compares HDFC Bank and Finward Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HDFC Bank	$54.16 billion	2.25	$7.51 billion	$1.70	14.05
Finward Bancorp	$69.12 million	2.84	$8.09 million	$2.27	19.94

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

Profitability

This table compares HDFC Bank and Finward Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HDFC Bank	15.96%	11.84%	1.64%
Finward Bancorp	9.65%	5.75%	0.48%

Insider & Institutional Ownership

17.6% of HDFC Bank shares are held by institutional investors. Comparatively, 26.6% of Finward Bancorp shares are held by institutional investors. 1.0% of HDFC Bank shares are held by insiders. Comparatively, 13.1% of Finward Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

About HDFC Bank

HDFC Bank Limited provides banking and financial services to individuals and businesses in India, Bahrain, Hong Kong, and Dubai. The company operates in three segments: Wholesale Banking, Retail Banking, and Treasury Services. It accepts savings, salary, current, rural, public provident fund, pension, and demat accounts; fixed and recurring deposits; and safe deposit lockers, as well as offshore accounts and deposits, and overdrafts against fixed deposits. The company also provides personal, home, car, two-wheeler, business, doctor, educational, gold, consumer, and rural loans; loans against properties, securities, fixed deposits, rental receivables, and assets; loans for professionals; government sponsored programs; and loans on credit card, as well as working capital and commercial/construction equipment finance, healthcare/medical equipment and commercial vehicle finance, dealer finance, and term loans. In addition, it offers credit, debit, prepaid, and forex cards; payment and collection, export, import, remittance, bank guarantee, letter of credit, trade, hedging, and merchant and cash management services; insurance and investment products. Further, the company provides short term finance, bill discounting, structured finance, export credit, loan repayment, and documents collection services; online and wholesale, mobile, and phone banking services; unified payment interface, immediate payment, national electronic funds transfer, and real time gross settlement services; and channel financing, vendor financing, reimbursement account, money market, derivatives, employee trusts, cash surplus corporates, tax payment, and bankers to rights/public issue services, as well as financial solutions for supply chain partners and agricultural customers. It operates branches and automated teller machines in various cities/towns. The company was incorporated in 1994 and is headquartered in Mumbai, India.

About Finward Bancorp

Finward Bancorp operates as the holding company for Peoples Bank that provides various banking products and services. The company’s deposit products include non-interest- and interest-bearing demand accounts, savings accounts, money market deposit accounts, certificate accounts, and retirement savings plans. Its loan products portfolio comprises residential mortgage loans that enable borrowers to purchase existing homes, refinance existing homes, or construct new homes; construction loans primarily to individuals and contractors; commercial real estate loans; consumer loans to individuals for personal, household, or family purposes; home equity line of credit; home improvement loans and equity loans; commercial business loans; government loans; and loans to municipalities. The company also offers estate and retirement planning, custodial services, guardianships, IRA accounts, and investment agency accounts, as well as serves as the personal representative of estates, and acts as trustee for revocable and irrevocable trusts. In addition, it provides insurance and annuity investments to wealth management customers; holds real estate properties; and operates as a real estate investment trust. The company was formerly known as NorthWest Indiana Bancorp and changed its name to Finward Bancorp in May 2021. Finward Bancorp was founded in 1916 and is headquartered in Munster, Indiana.