Avidia Bancorp (NYSE:AVBC) & Timberland Bancorp (NASDAQ:TSBK) Critical Analysis

Timberland Bancorp (NASDAQ:TSBK) and Avidia Bancorp (NYSE:AVBC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Profitability

This table compares Timberland Bancorp and Avidia Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timberland Bancorp	26.46%	11.72%	1.55%
Avidia Bancorp	11.51%	4.62%	0.63%

Analyst Ratings

This is a breakdown of current ratings and price targets for Timberland Bancorp and Avidia Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timberland Bancorp	0	0	1	0	3.00
Avidia Bancorp	1	0	0	1	2.50

Insider and Institutional Ownership

65.5% of Timberland Bancorp shares are held by institutional investors. 3.6% of Timberland Bancorp shares are held by company insiders. Comparatively, 3.4% of Avidia Bancorp shares are held by company 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

Timberland Bancorp pays an annual dividend of $1.20 per share and has a dividend yield of 2.6%. Avidia Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Timberland Bancorp pays out 30.1% of its earnings in the form of a dividend. Avidia Bancorp pays out 25.3% 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. Timberland Bancorp has increased its dividend for 13 consecutive years. Timberland Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Timberland Bancorp and Avidia Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Timberland Bancorp	$114.63 million	3.19	$29.16 million	$3.99	11.78
Avidia Bancorp	$147.61 million	2.97	-$3.29 million	$0.95	23.09

Timberland Bancorp has higher earnings, but lower revenue than Avidia Bancorp. Timberland Bancorp is trading at a lower price-to-earnings ratio than Avidia Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Timberland Bancorp beats Avidia Bancorp on 12 of the 16 factors compared between the two stocks.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.

About Avidia Bancorp

Avidia Bancorp Inc. is a chartered stock savings bank. It operates full-service banking offices principally in western Middlesex County and eastern Worcester County, in Massachusetts. Avidia Bancorp Inc. is based in HUDSON, Mass.