Head-To-Head Review: Finward Bancorp (NASDAQ:FNWD) versus Lake Shore Bancorp (NASDAQ:LSBK)

Finward Bancorp (NASDAQ:FNWD) and Lake Shore Bancorp (NASDAQ:LSBK) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Analyst Ratings

This is a breakdown of recent recommendations for Finward Bancorp and Lake Shore Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Finward Bancorp	0	1	2	0	2.67
Lake Shore Bancorp	0	0	0	1	4.00

Finward Bancorp currently has a consensus price target of $41.00, suggesting a potential downside of 5.88%. Given Finward Bancorp’s higher probable upside, equities research analysts clearly believe Finward Bancorp is more favorable than Lake Shore Bancorp.

Profitability

This table compares Finward Bancorp and Lake Shore Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Finward Bancorp	9.65%	5.68%	0.48%
Lake Shore Bancorp	20.62%	5.84%	1.15%

Risk and Volatility

Finward Bancorp has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500. Comparatively, Lake Shore Bancorp has a beta of 0.3, suggesting that its share price is 70% less volatile than the S&P 500.

Valuation & Earnings

This table compares Finward Bancorp and Lake Shore Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Finward Bancorp	$101.06 million	1.87	$8.09 million	$2.27	19.19
Lake Shore Bancorp	$30.24 million	4.83	$7.27 million	$1.12	16.62

Finward Bancorp has higher revenue and earnings than Lake Shore Bancorp. Lake Shore Bancorp is trading at a lower price-to-earnings ratio than Finward Bancorp, indicating that it is currently the more affordable of the two stocks.

Dividends

Finward Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.1%. Lake Shore Bancorp pays an annual dividend of $0.36 per share and has a dividend yield of 1.9%. Finward Bancorp pays out 21.1% of its earnings in the form of a dividend. Lake Shore Bancorp pays out 32.1% 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.

Insider & Institutional Ownership

26.6% of Finward Bancorp shares are held by institutional investors. Comparatively, 8.7% of Lake Shore Bancorp shares are held by institutional investors. 13.1% of Finward Bancorp shares are held by insiders. Comparatively, 8.4% of Lake Shore Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Finward Bancorp beats Lake Shore Bancorp on 9 of the 17 factors compared between the two stocks.

About Finward Bancorp

Finward Bancorp operates as the holding company for Peoples Bank that provides various banking products and services. The company’s deposit products include non-interest- and interest-bearing demand accounts, savings accounts, money market deposit accounts, certificate accounts, and retirement savings plans. Its loan products portfolio comprises residential mortgage loans that enable borrowers to purchase existing homes, refinance existing homes, or construct new homes; construction loans primarily to individuals and contractors; commercial real estate loans; consumer loans to individuals for personal, household, or family purposes; home equity line of credit; home improvement loans and equity loans; commercial business loans; government loans; and loans to municipalities. The company also offers estate and retirement planning, custodial services, guardianships, IRA accounts, and investment agency accounts, as well as serves as the personal representative of estates, and acts as trustee for revocable and irrevocable trusts. In addition, it provides insurance and annuity investments to wealth management customers; holds real estate properties; and operates as a real estate investment trust. The company was formerly known as NorthWest Indiana Bancorp and changed its name to Finward Bancorp in May 2021. Finward Bancorp was founded in 1916 and is headquartered in Munster, Indiana.

About Lake Shore Bancorp

Lake Shore Bancorp, Inc. operates as a savings and loan holding company for Lake Shore Servings Bank. It offers personal services such as checking, savings, lending, banking, debit card, e-services, and online banking; and business services including deposit products, commercial loans, and business e-statements. The company was founded in 2006 and is headquartered in Dunkirk, NY.