Reviewing Northeast Community Bancorp (NASDAQ:NECB) & First Interstate BancSystem (NASDAQ:FIBK)

First Interstate BancSystem (NASDAQ:FIBK) and Northeast Community Bancorp (NASDAQ:NECB) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, profitability and institutional ownership.

Risk & Volatility

First Interstate BancSystem has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Northeast Community Bancorp has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for First Interstate BancSystem and Northeast Community Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Interstate BancSystem	3	4	2	0	1.89
Northeast Community Bancorp	0	1	1	2	3.25

First Interstate BancSystem currently has a consensus price target of $37.00, indicating a potential upside of 0.60%. Northeast Community Bancorp has a consensus price target of $29.50, indicating a potential upside of 6.23%. Given Northeast Community Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Northeast Community Bancorp is more favorable than First Interstate BancSystem.

Dividends

First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 5.1%. Northeast Community Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.6%. First Interstate BancSystem pays out 58.6% of its earnings in the form of a dividend. Northeast Community Bancorp pays out 32.9% 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. Northeast Community Bancorp has raised its dividend for 2 consecutive years.

Valuation & Earnings

This table compares First Interstate BancSystem and Northeast Community Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Interstate BancSystem	$1.05 billion	3.34	$302.10 million	$3.21	11.46
Northeast Community Bancorp	$158.21 million	2.42	$44.41 million	$3.04	9.13

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

Profitability

This table compares First Interstate BancSystem and Northeast Community Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Interstate BancSystem	23.63%	9.33%	1.20%
Northeast Community Bancorp	27.21%	11.55%	1.99%

Insider & Institutional Ownership

88.7% of First Interstate BancSystem shares are owned by institutional investors. Comparatively, 53.2% of Northeast Community Bancorp shares are owned by institutional investors. 8.0% of First Interstate BancSystem shares are owned by company insiders. Comparatively, 7.1% of Northeast Community Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

First Interstate BancSystem beats Northeast Community Bancorp on 10 of the 18 factors compared between the two stocks.

About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.

About Northeast Community Bancorp

Northeast Community Bancorp, Inc. operates as the holding company for NorthEast Community Bank that provides financial services for individuals and businesses. It accepts various deposit instruments, including checking accounts, money market accounts, regular savings accounts, and non-interest bearing demand accounts, as well as certificates of deposits. The company also offers construction, commercial and industrial, multifamily and mixed-use real estate, non-residential real estate loans, and consumer loans. In addition, it invests in various types of liquid assets, including U.S. Treasury obligations, municipal securities, deposits at the Federal Home Loan Bank of New York, and certificates of deposit of federally insured institutions, as well as securities of various federal agencies, and of state and municipal governments. Further, the company offers financial planning and investment advisory services; and life insurance products and fixed-rate annuities. It operates full-service branches located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts; and loan production offices located in White Plains, New York, and New City counties in New York and Danvers, Massachusetts. Northeast Community Bancorp, Inc. was founded in 1934 and is headquartered in White Plains, New York.