Flagstar Financial (NYSE:FLG) and FS Bancorp (NASDAQ:FSBW) Head-To-Head Survey

FS Bancorp (NASDAQ:FSBW) and Flagstar Financial (NYSE:FLG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Institutional and Insider Ownership

63.9% of FS Bancorp shares are held by institutional investors. Comparatively, 67.9% of Flagstar Financial shares are held by institutional investors. 12.7% of FS Bancorp shares are held by company insiders. Comparatively, 19.4% of Flagstar Financial shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

FS Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.9%. Flagstar Financial pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. FS Bancorp pays out 25.7% of its earnings in the form of a dividend. Flagstar Financial pays out -1.5% 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. FS Bancorp has raised its dividend for 12 consecutive years. FS Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

FS Bancorp has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500. Comparatively, Flagstar Financial has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for FS Bancorp and Flagstar Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FS Bancorp	0	1	0	0	2.00
Flagstar Financial	0	4	4	0	2.50

FS Bancorp presently has a consensus target price of $44.00, suggesting a potential upside of 15.06%. Flagstar Financial has a consensus target price of $13.50, suggesting a potential upside of 14.89%. Given FS Bancorp’s higher probable upside, equities analysts clearly believe FS Bancorp is more favorable than Flagstar Financial.

Profitability

This table compares FS Bancorp and Flagstar Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FS Bancorp	16.97%	12.35%	1.18%
Flagstar Financial	-17.16%	-10.72%	-0.76%

Valuation & Earnings

This table compares FS Bancorp and Flagstar Financial”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FS Bancorp	$150.88 million	1.95	$35.02 million	$4.35	8.79
Flagstar Financial	$2.32 billion	2.10	-$1.09 billion	($2.60)	-4.52

FS Bancorp has higher earnings, but lower revenue than Flagstar Financial. Flagstar Financial is trading at a lower price-to-earnings ratio than FS Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

FS Bancorp beats Flagstar Financial on 9 of the 17 factors compared between the two stocks.

About FS Bancorp

FS Bancorp, Inc. operates as a bank holding company for 1st Security Bank of Washington that provides banking and financial services to local families, local and regional businesses, and industry niches. The company operates in two segments, Commercial and Consumer Banking; and Home Lending. It offers various deposit instruments, including checking accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company provides one-to-four-family residential first mortgages, second mortgage/home equity loan products, non-mortgage commercial business loans, commercial real estate loans, and construction and development loans, as well as consumer loans, which primarily include personal lines of credit, credit cards, automobile, direct home improvement, loans on deposit, and recreational loans. It operates full bank service branches and home loan production offices in suburban communities in the greater Puget Sound area, including Snohomish, King, Pierce, Jefferson, Kitsap, Clallam, Grays Harbor, and Thurston counties; and a loan production office in the market area of the Tri-Cities. FS Bancorp, Inc. was founded in 1936 and is headquartered in Mountlake Terrace, Washington.

About Flagstar Financial

Flagstar Financial, Inc. operates as the bank holding company for Flagstar Bank, N.A. that provides banking products and services in the United States. The company’s deposit products include interest-bearing checking and money market, savings, non-interest-bearing, and retirement accounts, as well as certificates of deposit. Its loan products comprise multi-family loans; commercial real estate loans; acquisition, development, and construction loans; commercial and industrial loans; one-to-four family loans; specialty finance loans and leases; warehouse loans; and other loans, such as home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans, and other consumer loans, including overdraft loans. The company offers cash management products; non-deposit investment and insurance products; and online banking, mobile banking, and bank-by-phone services. It primarily serves individuals, small and mid-size businesses, and professional associations. The company was formerly known as New York Community Bancorp, Inc. and changed its name to Flagstar Financial, Inc. in October 2024. Flagstar Financial, Inc. was founded in 1859 and is headquartered in Hicksville, New York.