Reviewing Norwood Financial (NASDAQ:NWFL) & International Bancshares (NASDAQ:IBOC)

Norwood Financial (NASDAQ:NWFL) and International Bancshares (NASDAQ:IBOC) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, valuation, institutional ownership, dividends, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Norwood Financial and International Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norwood Financial	0	1	1	0	2.50
International Bancshares	0	0	1	0	3.00

Norwood Financial presently has a consensus price target of $35.00, suggesting a potential upside of 1.38%. International Bancshares has a consensus price target of $85.00, suggesting a potential upside of 20.89%. Given International Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe International Bancshares is more favorable than Norwood Financial.

Earnings & Valuation

This table compares Norwood Financial and International Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norwood Financial	$102.51 million	3.67	$27.75 million	$2.90	11.91
International Bancshares	$859.07 million	5.09	$412.29 million	$6.63	10.60

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

Institutional and Insider Ownership

28.1% of Norwood Financial shares are held by institutional investors. Comparatively, 65.9% of International Bancshares shares are held by institutional investors. 8.1% of Norwood Financial shares are held by insiders. Comparatively, 13.1% of International Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Norwood Financial pays an annual dividend of $1.28 per share and has a dividend yield of 3.7%. International Bancshares pays an annual dividend of $1.46 per share and has a dividend yield of 2.1%. Norwood Financial pays out 44.1% of its earnings in the form of a dividend. International Bancshares pays out 22.0% 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. Norwood Financial has increased its dividend for 7 consecutive years and International Bancshares has increased its dividend for 16 consecutive years.

Volatility and Risk

Norwood Financial has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, International Bancshares has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Profitability

This table compares Norwood Financial and International Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norwood Financial	18.68%	12.88%	1.27%
International Bancshares	38.83%	12.67%	2.47%

Summary

International Bancshares beats Norwood Financial on 13 of the 16 factors compared between the two stocks.

About Norwood Financial

Norwood Financial Corp. operates as the bank holding company for Wayne Bank that provides various banking products and services. The company accepts a range of deposit products, including interest-bearing and non-interest-bearing transaction accounts, and statement savings and money market accounts, as well as certificate of deposits. It also provides commercial loans comprising lines of credit, revolving credit, term loans, mortgages, secured lending products, and letter of credit facilities; municipal finance lending; construction loans for commercial construction projects and single-family residences; land loans; construction financing; consumer loans; mortgage lending to finance principal residences and second home dwellings; and indirect dealer financing of new and used automobiles, boats, and recreational vehicles. In addition, the company offers investment securities services; personal and business credit services; trust and investment products; and cash management, direct deposit, remote deposit capture, mobile deposit capture, automated clearing house activity, real estate settlement, and Internet and mobile banking services. Further, it engages in the annuity and mutual fund sale, and discount brokerage activities, as well as insurance agency business. The company serves consumers, businesses, nonprofit organizations, and municipalities. It operates branches in Northeastern Pennsylvania; and in Delaware, Sullivan, Ontario, Otsego, and Yates Counties, New York, as well as automated teller machines. Norwood Financial Corp. was founded in 1870 and is headquartered in Honesdale, Pennsylvania.

About International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services in Texas and the State of Oklahoma. It accepts checking and saving deposits; and offers commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The company also provides international banking services, including letters of credit, commercial and industrial loans, and foreign exchange services. In addition, it offers other banking related services, such as credit cards, safety deposit boxes, collection, notary public, escrow, drive up and walk up facilities, and other customary banking services; and Internet banking services, as well as securities products through third party providers. The company was founded in 1966 and is headquartered in Laredo, Texas.