Old Line Bancshares (NASDAQ: OLBK) and First Financial Northwest (NASDAQ:FFNW) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Risk & Volatility

Old Line Bancshares has a beta of 0.27, indicating that its stock price is 73% less volatile than the S&P 500. Comparatively, First Financial Northwest has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Dividends

Old Line Bancshares pays an annual dividend of $0.32 per share and has a dividend yield of 1.1%. First Financial Northwest pays an annual dividend of $0.28 per share and has a dividend yield of 1.7%. Old Line Bancshares pays out 22.4% of its earnings in the form of a dividend. First Financial Northwest pays out 32.2% 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.

Profitability

This table compares Old Line Bancshares and First Financial Northwest’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Old Line Bancshares 21.68% 10.23% 0.91%
First Financial Northwest 18.74% 6.44% 0.86%

Valuation & Earnings

This table compares Old Line Bancshares and First Financial Northwest’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Old Line Bancshares $68.72 5.46 $13.15 $1.43 21.07
First Financial Northwest $44.36 4.11 $8.89 $0.87 19.46

Old Line Bancshares has higher revenue and earnings than First Financial Northwest. First Financial Northwest is trading at a lower price-to-earnings ratio than Old Line Bancshares, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

41.6% of Old Line Bancshares shares are held by institutional investors. Comparatively, 43.9% of First Financial Northwest shares are held by institutional investors. 25.1% of Old Line Bancshares shares are held by company insiders. Comparatively, 7.3% of First Financial Northwest shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for Old Line Bancshares and First Financial Northwest, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Old Line Bancshares 0 1 1 0 2.50
First Financial Northwest 0 0 0 0 N/A

Given Old Line Bancshares’ higher possible upside, equities analysts clearly believe Old Line Bancshares is more favorable than First Financial Northwest.

Summary

Old Line Bancshares beats First Financial Northwest on 12 of the 15 factors compared between the two stocks.

Old Line Bancshares Company Profile

Old Line Bancshares, Inc. is the holding company of Old Line Bank (The Bank). The Bank is a chartered trust company engaged in commercial banking business, making various types of loans, investments and accepting deposits. The Bank markets its financial services to small to medium sized businesses, entrepreneurs, professionals, consumers and clients. The Bank, through its division Old Line Financial Services, provides retirement planning and products, as well as investment services, including investment management, estate and succession planning, and allows its customers to directly purchase individual stocks, bonds and mutual funds. The Bank offers its customers safe deposit boxes, wire transfer services, debit cards, prepaid cards, automated teller machines at all of its branch locations, investment services and credit cards through a third party processor.

First Financial Northwest Company Profile

First Financial Northwest, Inc. (First Financial Northwest) is a holding company for First Financial Northwest Bank (the Bank). The Bank primarily serves the greater Puget Sound region of King and to a lesser extent, Pierce, Snohomish and Kitsap Counties, Washington through its full-service banking office located in Renton, Washington and branch office in Mill Creek, Washington. The Bank’s business consists of attracting deposits from the public and utilizing these funds to originate one- to four-family residential, multifamily, commercial real estate, construction/land development, business and consumer loans. It focuses on its lending activities primarily on loans secured by commercial real estate, construction/land development, first mortgages on one- to four-family residences, multifamily and business lending. Its investment portfolio consisted principally of mortgage-backed securities, municipal bonds, the United States Government Agency obligations and corporate bonds.

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