PCSB Financial (NASDAQ: PCSB) and Berkshire Hills Bancorp (NYSE:BHLB) are both small-cap financials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations for PCSB Financial and Berkshire Hills Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PCSB Financial 0 0 1 0 3.00
Berkshire Hills Bancorp 0 1 3 0 2.75

PCSB Financial presently has a consensus price target of $19.00, suggesting a potential downside of 4.09%. Berkshire Hills Bancorp has a consensus price target of $41.13, suggesting a potential upside of 10.25%. Given Berkshire Hills Bancorp’s higher possible upside, analysts clearly believe Berkshire Hills Bancorp is more favorable than PCSB Financial.

Earnings and Valuation

This table compares PCSB Financial and Berkshire Hills Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PCSB Financial $45.04 million 7.99 $3.22 million $0.11 180.09
Berkshire Hills Bancorp $485.95 million 3.48 $55.25 million $1.46 25.55

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

Dividends

Berkshire Hills Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.3%. PCSB Financial does not pay a dividend. Berkshire Hills Bancorp pays out 57.5% of its earnings in the form of a dividend. Berkshire Hills Bancorp has raised its dividend for 3 consecutive years.

Profitability

This table compares PCSB Financial and Berkshire Hills Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PCSB Financial 3.98% 3.05% 0.49%
Berkshire Hills Bancorp 11.37% 7.44% 0.95%

Institutional and Insider Ownership

40.4% of PCSB Financial shares are owned by institutional investors. Comparatively, 66.8% of Berkshire Hills Bancorp shares are owned by institutional investors. 1.6% of PCSB Financial shares are owned by insiders. Comparatively, 2.8% of Berkshire Hills Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Summary

Berkshire Hills Bancorp beats PCSB Financial on 12 of the 16 factors compared between the two stocks.

About PCSB Financial

PCSB Financial Corporation will be the holding company of PCSB Bank (the Bank). The Bank is a mutual savings bank. The Bank attracts deposits from the general public and utilizes those funds primarily to originate and purchase residential real estate, commercial real estate and business loans, and to purchase investment securities. As of September 30, 2016, the Bank had consolidated total assets of $1.25 billion, total deposits of $1.12 billion and equity of $111.5 million. The Bank’s provides commercial lending and deposit opportunities for its customers. The Bank operates in 15 locations, offices located in Dutchess, Putnam, Rockland and Westchester Counties in New York. The Bank’s subsidiaries include PCSB Commercial Bank, PCSB Funding Corp. and PCSB Realty Ltd.

About Berkshire Hills Bancorp

Berkshire Hills Bancorp, Inc. (Berkshire) is a holding company for Berkshire Bank (the Bank) and Berkshire Insurance Group. Berkshire offers a range of deposit, lending, insurance and wealth management products to retail, commercial, not-for-profit and municipal customers in its market areas. Berkshire product offerings also include retail and commercial electronic banking, commercial cash management and commercial interest rate swaps. The Bank’s loan portfolio consists of commercial loans, which include residential mortgages, commercial real estate, commercial and industrial loans, and consumer loans. The Bank’s securities available for sale include municipal bonds and obligations, mortgage-backed securities, other bonds and obligations, and marketable equity securities. As of October 16, 2017, the Bank had 113 full service branch offices in Massachusetts, New York, Connecticut, Vermont, New Jersey and Pennsylvania.

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