Analyzing First Northwest Bancorp (NASDAQ:FNWB) & Bankwell Financial Group (NASDAQ:BWFG)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bankwell Financial Group	19.80%	13.94%	1.27%
First Northwest Bancorp	1.32%	0.96%	0.07%

Institutional & Insider Ownership

35.8% of Bankwell Financial Group shares are held by institutional investors. Comparatively, 66.1% of First Northwest Bancorp shares are held by institutional investors. 21.0% of Bankwell Financial Group shares are held by insiders. Comparatively, 4.1% of First Northwest Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bankwell Financial Group	$207.71 million	2.55	$35.20 million	$5.35	12.43
First Northwest Bancorp	$118.64 million	0.80	-$4.19 million	$0.16	62.81

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Bankwell Financial Group and First Northwest Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bankwell Financial Group	0	1	2	1	3.00
First Northwest Bancorp	0	3	1	0	2.25

Bankwell Financial Group presently has a consensus price target of $67.50, suggesting a potential upside of 1.53%. First Northwest Bancorp has a consensus price target of $15.00, suggesting a potential upside of 49.25%. Given First Northwest Bancorp’s higher probable upside, analysts clearly believe First Northwest Bancorp is more favorable than Bankwell Financial Group.

Risk and Volatility

Bankwell Financial Group has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, First Northwest Bancorp has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Summary

Bankwell Financial Group beats First Northwest Bancorp on 11 of the 15 factors compared between the two stocks.

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.

About First Northwest Bancorp

First Northwest Bancorp operates as a bank holding company for First Fed Bank that provides commercial and consumer banking services to individuals, businesses, and nonprofit organizations in western Washington, the United States. The company accepts various deposit instruments, including checking, money market deposit, savings, and transaction accounts, as well as certificates of deposit. It also originates one- to four-family mortgage loans, commercial and multi-family real estate loans, construction and land loans, and commercial business loans, as well as consumer loans primarily consisting of automobile loans, and home-equity loans and lines of credit. First Northwest Bancorp operates branch offices in Clallam, Jefferson, King, Kitsap, and Whatcom Counties, Washington. First Northwest Bancorp was founded in 1923 and is based in Port Angeles, Washington.