Northeast Community Bancorp (NASDAQ:NECB – Get Free Report) and Norwood Financial (NASDAQ:NWFL – Get Free Report) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.
Dividends
Northeast Community Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 3.1%. Norwood Financial pays an annual dividend of $1.28 per share and has a dividend yield of 4.2%. Northeast Community Bancorp pays out 24.8% of its earnings in the form of a dividend. Norwood Financial pays out 47.2% 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. Northeast Community Bancorp has increased its dividend for 2 consecutive years and Norwood Financial has increased its dividend for 7 consecutive years. Norwood Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Profitability
This table compares Northeast Community Bancorp and Norwood Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Northeast Community Bancorp | 28.16% | 12.62% | 2.16% |
| Norwood Financial | 17.75% | 12.43% | 1.21% |
Institutional & Insider Ownership
Volatility & Risk
Northeast Community Bancorp has a beta of 0.36, meaning that its share price is 64% less volatile than the S&P 500. Comparatively, Norwood Financial has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.
Valuation & Earnings
This table compares Northeast Community Bancorp and Norwood Financial”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Northeast Community Bancorp | $158.21 million | 2.25 | $44.41 million | $3.22 | 7.99 |
| Norwood Financial | $136.15 million | 2.46 | $27.75 million | $2.71 | 11.35 |
Northeast Community Bancorp has higher revenue and earnings than Norwood Financial. Northeast Community Bancorp is trading at a lower price-to-earnings ratio than Norwood Financial, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings for Northeast Community Bancorp and Norwood Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Northeast Community Bancorp | 0 | 1 | 1 | 1 | 3.00 |
| Norwood Financial | 0 | 2 | 1 | 0 | 2.33 |
Norwood Financial has a consensus target price of $33.00, suggesting a potential upside of 7.25%. Given Norwood Financial’s higher possible upside, analysts clearly believe Norwood Financial is more favorable than Northeast Community Bancorp.
Summary
Northeast Community Bancorp beats Norwood Financial on 10 of the 17 factors compared between the two stocks.
About Northeast Community Bancorp
Northeast Community Bancorp, Inc. operates as the holding company for NorthEast Community Bank that provides financial services for individuals and businesses. It accepts various deposit instruments, including checking accounts, money market accounts, regular savings accounts, and non-interest bearing demand accounts, as well as certificates of deposits. The company also offers construction, commercial and industrial, multifamily and mixed-use real estate, non-residential real estate loans, and consumer loans. In addition, it invests in various types of liquid assets, including U.S. Treasury obligations, municipal securities, deposits at the Federal Home Loan Bank of New York, and certificates of deposit of federally insured institutions, as well as securities of various federal agencies, and of state and municipal governments. Further, the company offers financial planning and investment advisory services; and life insurance products and fixed-rate annuities. It operates full-service branches located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts; and loan production offices located in White Plains, New York, and New City counties in New York and Danvers, Massachusetts. Northeast Community Bancorp, Inc. was founded in 1934 and is headquartered in White Plains, New York.
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.
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