Flushing Financial (NASDAQ:FFIC) vs. Provident Financial Services (NYSE:PFS) Critical Review

Provident Financial Services (NYSE:PFS) and Flushing Financial (NASDAQ:FFIC) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Volatility & Risk

Provident Financial Services has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Flushing Financial has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.

Institutional & Insider Ownership

72.0% of Provident Financial Services shares are owned by institutional investors. Comparatively, 67.1% of Flushing Financial shares are owned by institutional investors. 3.0% of Provident Financial Services shares are owned by insiders. Comparatively, 5.7% of Flushing Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Provident Financial Services and Flushing Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Provident Financial Services	0	3	3	2	2.88
Flushing Financial	0	3	1	0	2.25

Provident Financial Services currently has a consensus target price of $23.93, indicating a potential upside of 1.89%. Flushing Financial has a consensus target price of $16.80, indicating a potential upside of 8.49%. Given Flushing Financial’s higher probable upside, analysts clearly believe Flushing Financial is more favorable than Provident Financial Services.

Profitability

This table compares Provident Financial Services and Flushing Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Provident Financial Services	21.95%	10.98%	1.23%
Flushing Financial	7.15%	6.25%	0.50%

Dividends

Provident Financial Services pays an annual dividend of $0.96 per share and has a dividend yield of 4.1%. Flushing Financial pays an annual dividend of $0.88 per share and has a dividend yield of 5.7%. Provident Financial Services pays out 40.9% of its earnings in the form of a dividend. Flushing Financial pays out 88.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Provident Financial Services and Flushing Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Provident Financial Services	$1.38 billion	2.21	$291.16 million	$2.35	9.99
Flushing Financial	$489.63 million	1.07	$18.88 million	$1.00	15.49

Provident Financial Services has higher revenue and earnings than Flushing Financial. Provident Financial Services is trading at a lower price-to-earnings ratio than Flushing Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Provident Financial Services beats Flushing Financial on 13 of the 17 factors compared between the two stocks.

About Provident Financial Services

Provident Financial Services, Inc. operates as the bank holding company for Provident Bank that provides various banking products and services to individuals, families, and businesses in the United States. Its deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA products. The company's loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, retail and industrial properties, and office buildings; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, personal loans and unsecured lines of credit, and auto and recreational vehicle loans. It also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, the company provides wealth management services comprising investment management, trust and estate administration, financial planning, and tax compliance and planning. Further, it sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.

About Flushing Financial

Flushing Financial Corporation operates as the bank holding company for Flushing Bank that provides banking products and services primarily to consumers, businesses, and governmental units. It offers various deposit products, including checking and savings accounts, money market accounts, non-interest bearing demand accounts, NOW accounts, and certificates of deposit. The company also provides mortgage loans secured by multi-family residential, commercial real estate, one-to-four family mixed-use property, one-to-four family residential property, and commercial business loans; construction loans; small business administration loans and other small business loans; mortgage loan surrogates, such as mortgage-backed securities; and consumer loans, including overdraft lines of credit, as well as the United States government securities, corporate fixed-income securities, and other marketable securities. It operates full-service banking offices in Queens, Nassau, Suffolk, Kings, and New York counties, New York; and an internet branch under the iGObanking and BankPurely brands. Flushing Financial Corporation was founded in 1929 and is based in Uniondale, New York.