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

Insider & Institutional Ownership

7.1% of Emclaire Financial shares are held by institutional investors. Comparatively, 71.5% of Northwest Bancshares shares are held by institutional investors. 18.3% of Emclaire Financial shares are held by insiders. Comparatively, 2.2% of Northwest Bancshares shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Emclaire Financial and Northwest Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Emclaire Financial 13.65% 9.02% 0.70%
Northwest Bancshares 21.95% 8.27% 1.06%

Risk and Volatility

Emclaire Financial has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Northwest Bancshares has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Emclaire Financial and Northwest Bancshares, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Emclaire Financial 0 0 0 0 N/A
Northwest Bancshares 0 2 0 0 2.00

Northwest Bancshares has a consensus target price of $17.00, suggesting a potential downside of 0.35%. Given Northwest Bancshares’ higher probable upside, analysts plainly believe Northwest Bancshares is more favorable than Emclaire Financial.

Dividends

Emclaire Financial pays an annual dividend of $1.12 per share and has a dividend yield of 3.4%. Northwest Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 4.0%. Northwest Bancshares pays out 81.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Emclaire Financial has increased its dividend for 2 consecutive years and Northwest Bancshares has increased its dividend for 2 consecutive years.

Earnings & Valuation

This table compares Emclaire Financial and Northwest Bancshares’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Emclaire Financial $31.42 million 2.40 $4.27 million N/A N/A
Northwest Bancshares $469.34 million 3.75 $94.46 million $0.84 20.31

Northwest Bancshares has higher revenue and earnings than Emclaire Financial.

Summary

Northwest Bancshares beats Emclaire Financial on 10 of the 13 factors compared between the two stocks.

About Emclaire Financial

Emclaire Financial Corp. operates as the bank holding company for The Farmers National Bank of Emlenton that provides retail and commercial financial products and services to individuals and businesses in western Pennsylvania. The company's deposit products include checking, savings, and term certificate accounts; time deposits; noninterest bearing and interest bearing demand deposit accounts; and money market accounts. Its loan portfolio comprises one-to-four family mortgage loans, residential and commercial mortgages loans, home equity loans, and commercial business and commercial real estate loans; and consumer loans, such as loans for automobile purchases, home improvements not secured by real estate, capital, and other personal expenditures, as well as unsecured revolving personal lines of credit and overdraft protection. The company, through its subsidiary, Emclaire Settlement Services, LLC, also provides real estate settlement services. As of January 26, 2018, it operated through 17 retail branch offices in Venango, Allegheny, Butler, Clarion, Clearfield, Crawford, Elk, Jefferson, and Mercer counties in Pennsylvania, as well as in Hancock County, West Virginia. The company was founded in 1900 and is headquartered in Emlenton, Pennsylvania.

About Northwest Bancshares

Northwest Bancshares, Inc. operates as a bank holding company for Northwest Savings Bank that offers various personal and business banking solutions in the United States. The company offers personal and business deposits, such as checking, savings, money market deposit, term certificate, and individual retirement accounts. Its loan portfolio comprise one-to-four family residential real estate, residential mortgage, short term consumer, multi-family residential and commercial real estate, commercial business, and home equity loans; lines of credit; and consumer loans, including automobile, sales finance, unsecured personal, and credit card loans, as well as loans secured by deposit accounts. In addition, the company offers employee benefit, property, and casualty insurance services; and trust, investment management, and brokerage services. As of December 31, 2017, it operated 172 community-banking locations in central and western Pennsylvania, western New York, and eastern Ohio. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Warren, Pennsylvania.

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