First Northern Community Bancorp (OTCMKTS:FNRN) and Waterstone Financial (NASDAQ:WSBF) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.

Earnings & Valuation

This table compares First Northern Community Bancorp and Waterstone Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Northern Community Bancorp $52.83 million 2.62 $12.55 million N/A N/A
Waterstone Financial $191.90 million 2.46 $30.75 million N/A N/A

Waterstone Financial has higher revenue and earnings than First Northern Community Bancorp.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for First Northern Community Bancorp and Waterstone Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Northern Community Bancorp 0 0 0 0 N/A
Waterstone Financial 1 0 0 0 1.00

Waterstone Financial has a consensus price target of $12.75, suggesting a potential downside of 24.33%. Given Waterstone Financial’s higher probable upside, analysts plainly believe Waterstone Financial is more favorable than First Northern Community Bancorp.

Profitability

This table compares First Northern Community Bancorp and Waterstone Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Northern Community Bancorp 25.48% 12.53% 1.13%
Waterstone Financial 15.71% 7.62% 1.59%

Institutional and Insider Ownership

6.2% of First Northern Community Bancorp shares are owned by institutional investors. Comparatively, 58.2% of Waterstone Financial shares are owned by institutional investors. 9.1% of First Northern Community Bancorp shares are owned by insiders. Comparatively, 12.1% of Waterstone Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

First Northern Community Bancorp has a beta of 0.44, meaning that its share price is 56% less volatile than the S&P 500. Comparatively, Waterstone Financial has a beta of 0.09, meaning that its share price is 91% less volatile than the S&P 500.

Dividends

Waterstone Financial pays an annual dividend of $0.48 per share and has a dividend yield of 2.8%. First Northern Community Bancorp does not pay a dividend.

Summary

Waterstone Financial beats First Northern Community Bancorp on 8 of the 12 factors compared between the two stocks.

First Northern Community Bancorp Company Profile

First Northern Community Bancorp operates as the bank holding company for First Northern Bank of Dixon that provides commercial banking products and services to individuals and small to medium sized businesses. The company accepts demand, interest-bearing transaction, savings and money market, and time deposits. Its loan products commercial, commercial real estate, agriculture, residential mortgage, residential construction, and consumer loans. The company also offers credit cards; investment and brokerage services; alternative investment products, and fiduciary and other financial services; and equipment leasing, merchant card processing, payroll, and international banking services through third parties. In addition, it provides issues cashier's checks; sells travelers' checks; rents safe deposit boxes; and provides other customary banking services. The company operates 10 full service branches located in the cities of Auburn, Davis, Dixon, Fairfield, Roseville, Sacramento, Vacaville, West Sacramento, Winters, and Woodland; a satellite banking office inside a retirement community in the city of Davis; residential mortgage loan offices in Davis and Sonoma; and a commercial loan office in the Contra Costa County city of Walnut Creek. First Northern Community Bancorp was founded in 1910 and is headquartered in Dixon, California.

Waterstone Financial Company Profile

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates through two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, and money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposit, and individual retirement accounts, as well as certificates of deposit; lending solutions consisting of residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, and insurance products, as well as trust and investment management accounts. The Mortgage Banking segment provides residential mortgage loans for the purpose of sale in the secondary market. The company also provides transaction deposit, demand deposit, and non-interest bearing demand accounts, as well as time deposits; construction and land loans; and term loans for working capital, inventory, and general corporate use. In addition, it invests in a portfolio of securities, which include mortgage-backed securities, government-sponsored enterprise bonds, municipal obligations, and other debt securities. Waterstone Financial, Inc. operates 11 full-service banking offices, 1 drive-through office, and 11 automated teller machines located in Milwaukee, Washington, and Waukesha Counties, Wisconsin, as well as a loan production office in Minneapolis, Minnesota. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. Waterstone Financial, Inc. was founded in 1921 and is based in Wauwatosa, Wisconsin.

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