Reviewing Freedom Financial (OTCMKTS:FDVA) & Bridgewater Bancshares (NASDAQ:BWB)

Bridgewater Bancshares (NASDAQ:BWB) and Freedom Financial (OTCMKTS:FDVA) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Volatility and Risk

Bridgewater Bancshares has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500. Comparatively, Freedom Financial has a beta of 0.2, indicating that its share price is 80% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bridgewater Bancshares and Freedom Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bridgewater Bancshares	$253.27 million	1.80	$32.83 million	$1.33	12.50
Freedom Financial	$66.41 million	1.22	$4.71 million	$0.71	16.06

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

Profitability

This table compares Bridgewater Bancshares and Freedom Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bridgewater Bancshares	14.52%	10.27%	0.80%
Freedom Financial	6.54%	5.21%	0.40%

Insider & Institutional Ownership

65.8% of Bridgewater Bancshares shares are held by institutional investors. 23.3% of Bridgewater Bancshares shares are held by insiders. Comparatively, 13.3% of Freedom Financial shares are held by 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.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Bridgewater Bancshares and Freedom Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bridgewater Bancshares	0	2	2	0	2.50
Freedom Financial	0	0	0	0	0.00

Bridgewater Bancshares currently has a consensus price target of $20.50, suggesting a potential upside of 23.27%. Given Bridgewater Bancshares’ stronger consensus rating and higher possible upside, research analysts plainly believe Bridgewater Bancshares is more favorable than Freedom Financial.

Summary

Bridgewater Bancshares beats Freedom Financial on 13 of the 14 factors compared between the two stocks.

About Bridgewater Bancshares

Bridgewater Bancshares, Inc. operates as the bank holding company for Bridgewater Bank that provides banking products and services to commercial real estate investors, entrepreneurs, business clients, and individuals in the United States. The company provides savings and money market accounts, demand deposits, time and brokered deposits, and interest and noninterest bearing transaction, as well as certificates of deposit. It offers commercial loans to sole proprietorships, partnerships, corporations, and other business enterprises to finance working capital, capital investment, or for other business related purposes; paycheck protection program loans; construction and land development loans; 1-4 family mortgage loans; multifamily lending products; owner and non-owner occupied commercial real estate loans; and consumer and other loans. In addition, the company online, mobile, and direct banking services. Bridgewater Bancshares, Inc. was incorporated in 2005 and is headquartered in Saint Louis Park, Minnesota.

About Freedom Financial

Freedom Financial Holdings, Inc. operates as the bank holding company for The Freedom Bank of Virginia that provides commercial banking, personal banking, and mortgage banking solutions. The company offers personal and business checking accounts, interest bearing business savings accounts, money market accounts, personal savings accounts, certificates of deposits, and IRAs, as well as insured cash sweep and certificate of deposit account registry services. It also provides business term, personal, and mortgage loans; commercial lines of credit; commercial real estate mortgage and small business lending services; home equity lines; and credit cards. In addition, the company offers treasury management, online and mobile banking, remote deposit capture, ACH, and wire transfer services; business valuation, bank-at-work, and merchant services; and prestige banking services. The company was founded in 2001 and is headquartered in Fairfax, Virginia.