Comparing Bankwell Financial Group (NASDAQ:BWFG) & Penns Woods Bancorp (NASDAQ:PWOD)

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

Earnings and Valuation

This table compares Bankwell Financial Group and Penns Woods Bancorp’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bankwell Financial Group	$120.99 million	1.62	$37.43 million	$4.57	5.47
Penns Woods Bancorp	$67.21 million	2.41	$17.42 million	$2.61	8.77

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

Volatility and Risk

Bankwell Financial Group has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Penns Woods Bancorp has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Bankwell Financial Group and Penns Woods Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bankwell Financial Group	0	0	2	0	3.00
Penns Woods Bancorp	0	0	0	0	N/A

Bankwell Financial Group presently has a consensus price target of $30.50, indicating a potential upside of 22.05%. Given Bankwell Financial Group’s higher probable upside, equities research analysts plainly believe Bankwell Financial Group is more favorable than Penns Woods Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bankwell Financial Group	21.69%	14.80%	1.14%
Penns Woods Bancorp	21.70%	11.06%	0.93%

Dividends

Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 3.2%. Penns Woods Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 5.6%. Bankwell Financial Group pays out 17.5% of its earnings in the form of a dividend. Penns Woods Bancorp pays out 49.0% 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. Bankwell Financial Group has raised its dividend for 5 consecutive years.

Institutional and Insider Ownership

32.8% of Bankwell Financial Group shares are owned by institutional investors. Comparatively, 25.3% of Penns Woods Bancorp shares are owned by institutional investors. 25.8% of Bankwell Financial Group shares are owned by insiders. Comparatively, 4.0% of Penns Woods Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Bankwell Financial Group beats Penns Woods Bancorp on 12 of the 16 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, 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 secured by savings or certificate accounts and automobiles; and unsecured personal loans and overdraft lines of credit. It operates branches in New Canaan, Stamford, Fairfield, Wilton, 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 Penns Woods Bancorp

Penns Woods Bancorp, Inc. operates as the bank holding company for Jersey Shore State Bank, which provides commercial and retail banking services to individuals, partnerships, non-profit organizations, and corporations. It accepts time, demand, and savings deposits, including super NOW accounts, statement savings accounts, money market accounts, and certificates of deposit, as well as checking and IRAs accounts. The company also offers loan products comprising residential, commercial, and construction real estate loans; agricultural loans for the purchase or improvement of real estate; commercial loans for the acquisition and improvement of real estate, purchase of equipment, and working capital purposes; letters of credit; consumer loans, such as construction and residential mortgages, home equity loans and lines, automobile financing, personal loans and lines of credit, and overdraft and check lines; and revolving credit loans with overdraft protection. In addition, it provides securities brokerage and financial planning services, which include the sale of life insurance products, annuities, and estate planning services; property and casualty, and auto insurance products; safe deposit services; ATM services; and Internet and telephone banking services. Further, the company engages in real estate transactions and investment activities. It operates through a network of offices located in Clinton, Lycoming, Centre, Montour, Union, Blair, and Luzerne Counties, Pennsylvania. The company was founded in 1934 and is headquartered in Williamsport, Pennsylvania.