Financial Analysis: Bankwell Financial Group (BWFG) & Citizens & Northern (CZNC)

Bankwell Financial Group (NASDAQ:BWFG) and Citizens & Northern (NASDAQ:CZNC) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.

Profitability

This table compares Bankwell Financial Group and Citizens & Northern’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bankwell Financial Group 19.82% 10.88% 0.99%
Citizens & Northern 27.35% 9.97% 1.47%

Dividends

Bankwell Financial Group pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. Citizens & Northern pays an annual dividend of $1.08 per share and has a dividend yield of 4.2%. Bankwell Financial Group pays out 23.6% of its earnings in the form of a dividend. Bankwell Financial Group has raised its dividend for 2 consecutive years.

Analyst Recommendations

This is a breakdown of current ratings for Bankwell Financial Group and Citizens & Northern, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bankwell Financial Group 0 2 1 0 2.33
Citizens & Northern 0 1 0 0 2.00

Bankwell Financial Group currently has a consensus target price of $35.50, suggesting a potential upside of 26.79%. Citizens & Northern has a consensus target price of $29.00, suggesting a potential upside of 13.46%. Given Bankwell Financial Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Bankwell Financial Group is more favorable than Citizens & Northern.

Institutional and Insider Ownership

48.8% of Bankwell Financial Group shares are held by institutional investors. Comparatively, 29.4% of Citizens & Northern shares are held by institutional investors. 21.9% of Bankwell Financial Group shares are held by insiders. Comparatively, 4.2% of Citizens & Northern shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Bankwell Financial Group has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500. Comparatively, Citizens & Northern has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bankwell Financial Group and Citizens & Northern’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bankwell Financial Group $75.83 million 2.89 $13.83 million $2.03 13.79
Citizens & Northern $62.02 million 5.07 $13.43 million N/A N/A

Bankwell Financial Group has higher revenue and earnings than Citizens & Northern.

Summary

Bankwell Financial Group beats Citizens & Northern on 9 of the 16 factors compared between the two stocks.

Bankwell Financial Group Company Profile

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides a range of banking services to commercial and consumer customers in Connecticut. It accepts checking, savings, and money market accounts; and demand and NOW deposits, as well as certificates of deposit. The company also provides commercial lending products, including residential real estate loans, owner-occupied commercial real estate loans, commercial real estate investment loans, business term loans, equipment financing, and lines of credit to small and mid-sized businesses, as well as real estate construction and development loans; and consumer loans, such as loans secured by savings or certificate accounts, or automobiles, as well as unsecured personal loans and overdraft lines of credit. It operates through a network of nine branches. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.

Citizens & Northern Company Profile

Citizens & Northern Corporation operates as the bank holding company for Citizens & Northern Bank that provides a range of banking and mortgage services to individual and corporate customers in North Central Pennsylvania and Southern New York. The company offers deposit products, including various types of checking accounts, passbook and statement savings accounts, money market accounts, interest checking accounts, individual retirement accounts, and certificates of deposits, as well as non-insured RepoSweep accounts. It also provides loans comprising mortgage loans, commercial loans, and consumer loans, as well as specialized instruments, such as commercial letters-of-credit. In addition, the company offers trust and financial management services consisting of administration of trusts and estates, retirement plans, and other employee benefit plans; investment management services; and a range of personal and commercial insurance products, as well as mutual funds, annuities, educational savings accounts, and other investment products through registered agents. It operates 26 banking offices in Bradford, Cameron, Lycoming, McKean, Potter, Sullivan, and Tioga counties in Pennsylvania, as well as Steuben County in New York. Citizens & Northern Corporation was founded in 1864 and is headquartered in Wellsboro, Pennsylvania.

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