Contrasting Sturgis Bancorp (OTCMKTS:STBI) and Northwest Bancshares (OTCMKTS:NWBI)

Sturgis Bancorp (OTCMKTS:STBI) and Northwest Bancshares (NASDAQ:NWBI) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Insider and Institutional Ownership

72.1% of Northwest Bancshares shares are owned by institutional investors. 16.0% of Sturgis Bancorp shares are owned by insiders. Comparatively, 1.4% of Northwest Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Sturgis Bancorp has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500. Comparatively, Northwest Bancshares has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.

Profitability

This table compares Sturgis Bancorp and Northwest Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sturgis Bancorp 20.26% N/A N/A
Northwest Bancshares 22.08% 8.48% 1.10%

Earnings and Valuation

This table compares Sturgis Bancorp and Northwest Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sturgis Bancorp $22.48 million 2.03 $4.37 million N/A N/A
Northwest Bancshares $467.48 million 3.89 $105.49 million $1.02 17.21

Northwest Bancshares has higher revenue and earnings than Sturgis Bancorp.

Analyst Recommendations

This is a summary of recent ratings and price targets for Sturgis Bancorp and Northwest Bancshares, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sturgis Bancorp 0 0 0 0 N/A
Northwest Bancshares 0 1 0 0 2.00

Dividends

Sturgis Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 2.8%. Northwest Bancshares pays an annual dividend of $0.72 per share and has a dividend yield of 4.1%. Northwest Bancshares pays out 70.6% of its earnings in the form of a dividend. Northwest Bancshares has raised its dividend for 3 consecutive years. Northwest Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Northwest Bancshares beats Sturgis Bancorp on 11 of the 13 factors compared between the two stocks.

About Sturgis Bancorp

Sturgis Bancorp, Inc., a financial holding company, through its subsidiary, Sturgis Bank & Trust, provides banking products and services to individuals and businesses in the United States. The company offers checking, savings, money market, and sweep accounts; and certificates of deposit and individual retirement accounts. It also provides mortgage, automobile, savings and CD, personal, auto and recreational vehicle, commercial real estate, equipment and machinery, and government supported loans, as well as home equity lines of credit and business lines of credit. In addition, the company offers mortgage life, mortgage accidental death, and mortgage disability insurance products; and other personal banking services, such as private banking, cashier checks, wire transfers, money orders, foreign drafts and foreign currency, overdraft protection, night depository, and notary services, as well as safe deposit boxes. Further, it provides Internet and phone banking, Internet bill pay, direct deposit, Visa check card, merchant, CDARS, and remote deposit capture services; and wealth management and investment brokerage advisory services, as well as cash management services and e-statements. The company has branch offices in Bangor, Bronson, Centreville, Climax, Colon, South Haven, Sturgis, Three Rivers, and White Pigeon in Michigan. Sturgis Bancorp, Inc. was founded in 1905 and is headquartered in Sturgis, Michigan.

About Northwest Bancshares

Northwest Bancshares, Inc. is a holding company. It offers personal & business banking products including employee benefits, investment management services, insurance and trust. It engages in collecting deposits and making loans secured by various types of collateral, including real estate and other assets. The company was founded on June 29, 2001 and is headquartered in Warren, PA.

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