Western New England Bancorp (NASDAQ: WNEB) and 1st Constitution Bancorp (NJ) (NASDAQ:FCCY) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitability.

Dividends

Western New England Bancorp pays an annual dividend of $0.12 per share and has a dividend yield of 1.1%. 1st Constitution Bancorp (NJ) pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Western New England Bancorp pays out 24.5% of its earnings in the form of a dividend. 1st Constitution Bancorp (NJ) pays out 23.8% 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. 1st Constitution Bancorp (NJ) is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

56.7% of Western New England Bancorp shares are owned by institutional investors. Comparatively, 27.9% of 1st Constitution Bancorp (NJ) shares are owned by institutional investors. 5.6% of Western New England Bancorp shares are owned by company insiders. Comparatively, 14.5% of 1st Constitution Bancorp (NJ) shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Western New England Bancorp and 1st Constitution Bancorp (NJ)’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Western New England Bancorp $54.57 million 6.01 $4.83 million $0.49 21.84
1st Constitution Bancorp (NJ) $47.75 million 3.08 $9.28 million $1.01 18.07

1st Constitution Bancorp (NJ) has lower revenue, but higher earnings than Western New England Bancorp. 1st Constitution Bancorp (NJ) 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.

Analyst Ratings

This is a summary of current ratings and price targets for Western New England Bancorp and 1st Constitution Bancorp (NJ), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Western New England Bancorp 0 3 1 0 2.25
1st Constitution Bancorp (NJ) 0 1 0 0 2.00

Western New England Bancorp presently has a consensus price target of $11.50, indicating a potential upside of 7.48%. 1st Constitution Bancorp (NJ) has a consensus price target of $18.00, indicating a potential downside of 1.37%. Given Western New England Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe Western New England Bancorp is more favorable than 1st Constitution Bancorp (NJ).

Profitability

This table compares Western New England Bancorp and 1st Constitution Bancorp (NJ)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Western New England Bancorp 18.20% 5.95% 0.71%
1st Constitution Bancorp (NJ) 16.78% 7.79% 0.80%

Risk & Volatility

Western New England Bancorp has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500. Comparatively, 1st Constitution Bancorp (NJ) has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.

Summary

Western New England Bancorp beats 1st Constitution Bancorp (NJ) on 9 of the 16 factors compared between the two stocks.

About Western New England Bancorp

Western New England Bancorp, Inc., formerly Westfield Financial, Inc., is a Massachusetts-chartered stock holding company. The Company serves as a holding company for Westfield Bank (the Bank). It is a provider of banking products and services to business organizations and individuals, including products such as residential and commercial loans, consumer loans and a variety of deposit products. It focuses on residential real estate lending, as well as servicing commercial customers, including commercial and industrial lending and commercial deposit relationships. In addition, it provides online banking services. It operates through over 21 banking offices located in Agawam, Chicopee, East Longmeadow, Feeding Hills, Holyoke, Ludlow, Southwick, Springfield, Ware, West Springfield and Westfield, Massachusetts, and Granby and Enfield, Connecticut. It also has over 10 automated teller machine (ATM) locations in Holyoke, Southwick, Springfield, West Springfield and Westfield, Massachusetts.

About 1st Constitution Bancorp (NJ)

1st Constitution Bancorp is the bank holding company for 1st Constitution Bank (the Bank). The Bank is a commercial bank, which is engaged in the business of commercial and retail banking. The Company operates through the Community Banking segment. The Community Banking segment consists of construction, commercial, retail and mortgage banking operations. As a community bank, the Bank offers a range of services (including demand, savings and time deposits and commercial and consumer/installment loans) to individuals, small businesses and not-for-profit organizations principally in the Fort Lee area of Bergen County and in Middlesex, Mercer, Somerset and Monmouth Counties of New Jersey. The Bank’s Mortgage Warehouse Funding Group offers revolving lines of credit that are available to licensed mortgage banking companies (the Warehouse Line of Credit). The Bank’s investment activities are classified as available for sale and held to maturity securities.

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