Bankwell Financial Group (NASDAQ:BWFG) and West Shore Bank (OTCMKTS:WSSH) Critical Analysis

West Shore Bank (OTCMKTS:WSSH) and Bankwell Financial Group (NASDAQ:BWFG) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, risk, dividends, earnings and valuation.

Analyst Ratings

This is a summary of current ratings and target prices for West Shore Bank and Bankwell Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Shore Bank	0	0	0	0	0.00
Bankwell Financial Group	0	1	2	0	2.67

Bankwell Financial Group has a consensus price target of $52.00, indicating a potential downside of 10.34%. Given Bankwell Financial Group’s stronger consensus rating and higher probable upside, analysts clearly believe Bankwell Financial Group is more favorable than West Shore Bank.

Risk and Volatility

West Shore Bank has a beta of 0.01, suggesting that its stock price is 99% less volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.61, suggesting that its stock price is 39% less volatile than the S&P 500.

Profitability

This table compares West Shore Bank and Bankwell Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Shore Bank	N/A	N/A	N/A
Bankwell Financial Group	18.71%	13.31%	1.20%

Valuation & Earnings

This table compares West Shore Bank and Bankwell Financial Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Shore Bank	$48.89 million	1.08	$6.25 million	N/A	N/A
Bankwell Financial Group	$114.98 million	4.02	$35.20 million	$4.98	11.65

Bankwell Financial Group has higher revenue and earnings than West Shore Bank.

Insider & Institutional Ownership

35.8% of Bankwell Financial Group shares are held by institutional investors. 21.0% of Bankwell Financial Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

West Shore Bank pays an annual dividend of $0.96 per share and has a dividend yield of 2.2%. Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.4%. Bankwell Financial Group pays out 16.1% of its earnings in the form of a dividend.

Summary

Bankwell Financial Group beats West Shore Bank on 12 of the 14 factors compared between the two stocks.

About West Shore Bank

West Shore Bank Corp. operates as the bank holding company for West Shore Bank that provides various banking products and services for individuals and businesses. The company accepts checking, saving, money market, certificates of deposit, and individual retirement accounts. Its loan products include auto, recreational, personal term, commercial real estate, small business administration, municipal, business term, and home mortgage and equity loans; business lines of credit; and letters of credit. The company also offers ATM/debit, credit, and gift and travel cards; wealth planning process, investment management, trusts and estates, retirement planning, west shore investment services; savings bonds; and direct deposit, overdraft, safe deposit boxes, wire transfer, remote deposit capture, merchant card, ACH and wire, sweep accounts, positive pay, bill pay, and online and mobile banking services. The company was founded in 1898 and is based in Ludington, Michigan.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.