Comparing Northwest Bancshares (NASDAQ:NWBI) & Dime Community Bancshares (NASDAQ:DCOM)

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

Profitability

This table compares Northwest Bancshares and Dime Community Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northwest Bancshares	19.23%	9.21%	0.98%
Dime Community Bancshares	14.89%	9.85%	0.78%

Analyst Ratings

This is a breakdown of current ratings for Northwest Bancshares and Dime Community Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northwest Bancshares	0	1	0	0	2.00
Dime Community Bancshares	0	0	3	0	3.00

Northwest Bancshares presently has a consensus price target of $11.50, suggesting a potential upside of 4.07%. Dime Community Bancshares has a consensus price target of $25.88, suggesting a potential upside of 40.02%. Given Dime Community Bancshares’ stronger consensus rating and higher probable upside, analysts plainly believe Dime Community Bancshares is more favorable than Northwest Bancshares.

Dividends

Northwest Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 7.3%. Dime Community Bancshares pays an annual dividend of $1.00 per share and has a dividend yield of 5.4%. Northwest Bancshares pays out 75.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dime Community Bancshares pays out 43.7% of its earnings in the form of a dividend. Dime Community Bancshares has raised its dividend for 1 consecutive years.

Insider and Institutional Ownership

66.3% of Northwest Bancshares shares are owned by institutional investors. Comparatively, 75.3% of Dime Community Bancshares shares are owned by institutional investors. 1.1% of Northwest Bancshares shares are owned by company insiders. Comparatively, 10.3% of Dime Community Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Northwest Bancshares and Dime Community Bancshares’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northwest Bancshares	$701.74 million	2.00	$134.96 million	$1.06	10.41
Dime Community Bancshares	$645.57 million	1.11	$96.09 million	$2.29	8.08

Northwest Bancshares has higher revenue and earnings than Dime Community Bancshares. Dime Community Bancshares is trading at a lower price-to-earnings ratio than Northwest Bancshares, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Northwest Bancshares has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Dime Community Bancshares has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500.

Summary

Dime Community Bancshares beats Northwest Bancshares on 10 of the 17 factors compared between the two stocks.

About Northwest Bancshares

Northwest Bancshares, Inc. operates as the bank holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans, shorter term consumer loans, and loans collateralized by multi-family residential and commercial real estate; home equity loans and lines of credit; commercial business and real estate loans; commercial loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by investment accounts, as well as investment management and trust services. The company operates community banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.

About Dime Community Bancshares

Dime Community Bancshares, Inc. operates as the holding company for Dime Community Bank that engages in the provision of various commercial banking and financial services. The company accepts time, savings, and demand deposits from the businesses, consumers, and local municipalities. It also offers commercial real estate loans; multi-family mortgage loans; residential mortgage loans; letters of credit; secured and unsecured commercial and consumer loans; lines of credit; home equity loans; and construction and land loans. In addition, the company invests in Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, and Federal Home Loan Mortgage Corporation mortgage-backed securities, collateralized mortgage obligations, and other asset backed securities; U.S. Treasury securities; New York state and local municipal obligations; U.S. government-sponsored enterprise securities; and corporate bonds. Further, it offers certificate of deposit account registry services and insured cash sweep programs; federal deposit insurance corporation insurance; merchant credit and debit card processing, automated teller machines, cash management services, lockbox processing, online banking services, remote deposit capture, safe deposit boxes, and individual retirement accounts; investment products and services through a third-party broker dealer; and title insurance broker services for small and medium sized businesses, and municipal and consumer relationships. The company was founded in 1910 and is headquartered in Hauppauge, New York.