Business First Bancshares (NASDAQ:BFST – Get Free Report) and Western New England Bancorp (NASDAQ:WNEB – Get Free Report) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.
Volatility and Risk
Business First Bancshares has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Western New England Bancorp has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500.
Institutional & Insider Ownership
47.4% of Business First Bancshares shares are held by institutional investors. Comparatively, 67.9% of Western New England Bancorp shares are held by institutional investors. 5.7% of Business First Bancshares shares are held by company insiders. Comparatively, 6.6% of Western New England Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Profitability
This table compares Business First Bancshares and Western New England Bancorp’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Business First Bancshares | 17.08% | 11.18% | 1.15% |
| Western New England Bancorp | 14.53% | 8.04% | 0.72% |
Valuation & Earnings
This table compares Business First Bancshares and Western New England Bancorp”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Business First Bancshares | $516.55 million | 2.04 | $87.86 million | $2.80 | 11.69 |
| Western New England Bancorp | $90.03 million | 3.04 | $15.27 million | $1.00 | 13.65 |
Business First Bancshares has higher revenue and earnings than Western New England Bancorp. Business First Bancshares is trading at a lower price-to-earnings ratio than Western New England Bancorp, indicating that it is currently the more affordable of the two stocks.
Dividends
Business First Bancshares pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. Western New England Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 2.1%. Business First Bancshares pays out 21.4% of its earnings in the form of a dividend. Western New England Bancorp pays out 28.0% 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. Business First Bancshares has raised its dividend for 2 consecutive years.
Analyst Recommendations
This is a summary of current recommendations and price targets for Business First Bancshares and Western New England Bancorp, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Business First Bancshares | 0 | 0 | 5 | 0 | 3.00 |
| Western New England Bancorp | 0 | 3 | 1 | 0 | 2.25 |
Business First Bancshares presently has a consensus target price of $35.75, indicating a potential upside of 9.23%. Western New England Bancorp has a consensus target price of $15.50, indicating a potential upside of 13.55%. Given Western New England Bancorp’s higher probable upside, analysts plainly believe Western New England Bancorp is more favorable than Business First Bancshares.
Summary
Business First Bancshares beats Western New England Bancorp on 10 of the 16 factors compared between the two stocks.
About Business First Bancshares
Business First Bancshares, Inc. is the bank holding company for b1BANK, a regional bank serving businesses, individuals and institutions. The bank offers commercial and personal banking, treasury management, private banking and digital banking services. Founded in Louisiana in 2006 and headquartered in Baton Rouge, Business First has expanded its presence across Louisiana and into Texas. Its services include lending and deposit products for businesses, as well as checking, savings and other banking solutions for consumers.
About Western New England Bancorp
Western New England Bancorp, Inc. is the bank holding company for Westfield Bank, a community bank headquartered in Westfield, Massachusetts. The company provides banking and financial services to individuals, families, businesses, nonprofit organizations and municipalities. Westfield Bank offers deposit products, residential and commercial real estate lending, commercial and industrial loans, consumer loans, home equity financing and other credit services. Its services also include online and mobile banking, cash management, electronic payments and wealth management solutions.
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