Critical Analysis: Riverview Bancorp (RVSB) vs. Western New England Bancorp (WNEB)

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

Analyst Ratings

This is a summary of recent ratings and target prices for Riverview Bancorp and Western New England Bancorp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Riverview Bancorp 0 0 1 0 3.00
Western New England Bancorp 0 2 1 0 2.33

Riverview Bancorp presently has a consensus price target of $10.50, indicating a potential upside of 20.00%. Western New England Bancorp has a consensus price target of $11.83, indicating a potential upside of 11.01%. Given Riverview Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Riverview Bancorp is more favorable than Western New England Bancorp.

Institutional & Insider Ownership

60.3% of Riverview Bancorp shares are held by institutional investors. Comparatively, 55.5% of Western New England Bancorp shares are held by institutional investors. 7.0% of Riverview Bancorp shares are held by company insiders. Comparatively, 5.4% of Western New England Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Riverview Bancorp and Western New England Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Riverview Bancorp $55.96 million 3.53 $10.24 million $0.53 16.51
Western New England Bancorp $82.54 million 3.84 $12.32 million $0.50 21.32

Western New England Bancorp has higher revenue and earnings than Riverview Bancorp. Riverview Bancorp 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.

Dividends

Riverview Bancorp pays an annual dividend of $0.14 per share and has a dividend yield of 1.6%. Western New England Bancorp pays an annual dividend of $0.16 per share and has a dividend yield of 1.5%. Riverview Bancorp pays out 26.4% of its earnings in the form of a dividend. Western New England Bancorp pays out 32.0% 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. Riverview Bancorp has increased its dividend for 2 consecutive years. Riverview Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Riverview Bancorp has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500. Comparatively, Western New England Bancorp has a beta of 0.26, suggesting that its stock price is 74% less volatile than the S&P 500.

Profitability

This table compares Riverview Bancorp and Western New England Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Riverview Bancorp 20.97% 11.76% 1.21%
Western New England Bancorp 14.08% 6.48% 0.76%

Summary

Riverview Bancorp beats Western New England Bancorp on 12 of the 16 factors compared between the two stocks.

About Riverview Bancorp

Riverview Bancorp, Inc. operates as the holding company for Riverview Community Bank that provides community banking services to small and medium size businesses, professionals, and individuals. It offers a range of deposit products, including demand deposits, negotiable order of withdrawal accounts, money market accounts, savings accounts, certificates of deposit, and retirement savings plans. The company also provides commercial business, commercial real estate, other real estate mortgage, and real estate construction loans; and consumer loans, such as one-to-four family mortgage loans, home equity lines of credit, land loans, and other secured and unsecured consumer loans. In addition, it is involved in the provision of mortgage brokerage and mortgage loan servicing activities, as well as offers asset management services comprising trust, estate planning, and investment management services. The company operates through a network of 19 branch offices in Camas, Washougal, Stevenson, White Salmon, Battle Ground, Goldendale, Vancouver, and Longview, Washington; and Portland, Gresham, Tualatin, and Aumsville, Oregon. Riverview Bancorp, Inc. was founded in 1923 and is based in Vancouver, Washington.

About Western New England Bancorp

Western New England Bancorp, Inc. operates as the holding company for Westfield Bank that provides community banking products and services to individuals and businesses. The company accepts various deposit accounts, including time deposits, money market accounts, savings accounts, demand accounts, and interest bearing checking accounts. It also offers commercial and industrial loans comprising business installment loans, vehicle and equipment financing, lines of credit, and other commercial loans; commercial real estate loans to finance the purchase of apartment buildings, business properties, and multi-family investment properties; construction loans to the developers of commercial and residential properties; residential real estate loans and originations; home equity loans; and consumer loans. In addition, the company provides complementary commercial products and services consisting of commercial deposit accounts, cash management services, Internet banking, sweep accounts, ATM network, and night deposit services; and invests in government-sponsored enterprise debt securities and municipal bonds. It operates a network of 21 banking offices located in Agawam, Chicopee, Feeding Hills, East Longmeadow, Holyoke, Ludlow, South Hadley, Southwick, Springfield, Ware, West Springfield, and Westfield, Massachusetts, Granby and Enfield, and Connecticut. The company was formerly known as Westfield Financial, Inc. and changed its name to Western New England Bancorp, Inc. in October 2016. Western New England Bancorp, Inc. was founded in 1853 and is headquartered in Westfield, Massachusetts.

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