Comparing Suruga Bank (OTCMKTS:SUGBY) & Flushing Financial (NASDAQ:FFIC)

Suruga Bank (OTCMKTS:SUGBY) and Flushing Financial (NASDAQ:FFIC) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Suruga Bank	33.98%	11.18%	0.99%
Flushing Financial	7.15%	6.25%	0.50%

Earnings & Valuation

This table compares Suruga Bank and Flushing Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Suruga Bank	$730.15 million	1.89	$229.16 million	$13.12	6.10
Flushing Financial	$489.63 million	1.07	$18.88 million	$1.00	15.49

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

Insider & Institutional Ownership

67.1% of Flushing Financial shares are owned by institutional investors. 5.7% of Flushing Financial shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Suruga Bank has a beta of -0.04, indicating that its stock price is 104% less volatile than the S&P 500. Comparatively, Flushing Financial has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Suruga Bank and Flushing Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Suruga Bank	0	0	0	0	0.00
Flushing Financial	0	3	1	0	2.25

Flushing Financial has a consensus target price of $16.80, suggesting a potential upside of 8.49%. Given Flushing Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Flushing Financial is more favorable than Suruga Bank.

Dividends

Suruga Bank pays an annual dividend of $3.63 per share and has a dividend yield of 4.5%. Flushing Financial pays an annual dividend of $0.88 per share and has a dividend yield of 5.7%. Suruga Bank pays out 27.7% 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.

About Suruga Bank

Suruga Bank Ltd. provides various banking and financial products and services to individuals and corporate customers in Japan. The company offers deposit products, such as time, ordinary, savings, foreign currency, and other deposits, as well as current and general accounts; card, housing, second house, startup, and business up term loans, as well as loans by purpose; credit and debit cards; overdrafts; and other financing products. It also provides investment trust, public bond, pension contribution, insurance, inheritance/trust, lottery, foreign currency, pay-easy, web direct, safe deposit box, external linkage, foreign remittance, fund management, e-combination, payment, nursing care/medical care/dispensing compensation receivable factoring, mortgage, and Internet and telephone banking services. In addition, the company offers staffing, money lending, guarantee, printing, leasing, and agency services. The company was incorporated in 1895 and is headquartered in Numazu, Japan.

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.