America First Multifamily Investors, L.P. (NASDAQ: ATAX) and Berkshire Hills Bancorp (NYSE:BHLB) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Dividends

America First Multifamily Investors, L.P. pays an annual dividend of $0.50 per share and has a dividend yield of 8.3%. Berkshire Hills Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.5%. America First Multifamily Investors, L.P. pays out 156.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Berkshire Hills Bancorp pays out 46.2% of its earnings in the form of a dividend. America First Multifamily Investors, L.P. has raised its dividend for 2 consecutive years. America First Multifamily Investors, L.P. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

6.7% of America First Multifamily Investors, L.P. shares are held by institutional investors. Comparatively, 74.1% of Berkshire Hills Bancorp shares are held by institutional investors. 1.3% of America First Multifamily Investors, L.P. shares are held by company insiders. Comparatively, 2.8% of Berkshire Hills Bancorp shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares America First Multifamily Investors, L.P. and Berkshire Hills Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
America First Multifamily Investors, L.P. 33.34% 6.63% 2.09%
Berkshire Hills Bancorp 15.03% 6.93% 0.85%

Earnings and Valuation

This table compares America First Multifamily Investors, L.P. and Berkshire Hills Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
America First Multifamily Investors, L.P. $41.50 million 8.71 $19.28 million $0.32 18.75
Berkshire Hills Bancorp $336.88 million 3.97 $72.74 million $1.82 18.41

Berkshire Hills Bancorp has higher revenue and earnings than America First Multifamily Investors, L.P.. Berkshire Hills Bancorp is trading at a lower price-to-earnings ratio than America First Multifamily Investors, L.P., indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for America First Multifamily Investors, L.P. and Berkshire Hills Bancorp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
America First Multifamily Investors, L.P. 0 1 0 0 2.00
Berkshire Hills Bancorp 0 2 3 0 2.60

America First Multifamily Investors, L.P. presently has a consensus price target of $6.00, indicating a potential upside of 0.00%. Berkshire Hills Bancorp has a consensus price target of $37.13, indicating a potential upside of 10.82%. Given Berkshire Hills Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe Berkshire Hills Bancorp is more favorable than America First Multifamily Investors, L.P..

Volatility & Risk

America First Multifamily Investors, L.P. has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500. Comparatively, Berkshire Hills Bancorp has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500.

Summary

Berkshire Hills Bancorp beats America First Multifamily Investors, L.P. on 11 of the 17 factors compared between the two stocks.

About America First Multifamily Investors, L.P.

America First Multifamily Investors, L.P. is engaged in acquiring, holding, selling and dealing with a portfolio of mortgage revenue bonds, which have been issued to provide construction and/or permanent financing for multifamily and student housing (collectively Residential Properties) and commercial properties. Its segments are Mortgage Revenue Bond Investments, MF Properties, Public Housing Capital Fund Trusts and mortgage-backed securities (MBS) Investments. Its Mortgage Revenue Bond Investments segment consists of its portfolio of mortgage revenue bonds, which have been issued to provide construction and/or permanent financing for the residential properties and a commercial property. The MF Properties segment consists of indirect equity interests in multifamily, student housing, and senior citizen residential properties, which are not financed by mortgage revenue bonds held by the Company, but which it intends to finance by such bonds through a restructuring.

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 December 5, 2016, the Bank had 99 full service branch offices in Massachusetts, New York, Connecticut, Vermont, New Jersey and Pennsylvania.

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