Bankwell Financial Group (NASDAQ:BWFG) & First Northwest Bancorp (NASDAQ:FNWB) Critical Review

First Northwest Bancorp (NASDAQ:FNWB) and Bankwell Financial Group (NASDAQ:BWFG) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Risk & Volatility

First Northwest Bancorp has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Profitability

This table compares First Northwest Bancorp and Bankwell Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Northwest Bancorp	1.32%	0.96%	0.07%
Bankwell Financial Group	19.80%	13.94%	1.27%

Insider and Institutional Ownership

66.1% of First Northwest Bancorp shares are owned by institutional investors. Comparatively, 35.8% of Bankwell Financial Group shares are owned by institutional investors. 4.1% of First Northwest Bancorp shares are owned by insiders. Comparatively, 21.0% of Bankwell Financial Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for First Northwest Bancorp and Bankwell Financial Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Northwest Bancorp	0	3	1	0	2.25
Bankwell Financial Group	0	2	2	0	2.50

First Northwest Bancorp currently has a consensus target price of $15.00, indicating a potential upside of 49.85%. Bankwell Financial Group has a consensus target price of $67.50, indicating a potential upside of 3.32%. Given First Northwest Bancorp’s higher possible upside, equities research analysts plainly believe First Northwest Bancorp is more favorable than Bankwell Financial Group.

Valuation and Earnings

This table compares First Northwest Bancorp and Bankwell Financial Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Northwest Bancorp	$118.64 million	0.80	-$4.19 million	$0.16	62.56
Bankwell Financial Group	$121.82 million	4.28	$35.20 million	$5.35	12.21

Bankwell Financial Group has higher revenue and earnings than First Northwest Bancorp. Bankwell Financial Group is trading at a lower price-to-earnings ratio than First Northwest Bancorp, indicating that it is currently the more affordable of the two stocks.

Summary

Bankwell Financial Group beats First Northwest Bancorp on 10 of the 14 factors compared between the two stocks.

About First Northwest Bancorp

First Northwest Bancorp operates as a bank holding company for First Fed Bank that provides commercial and consumer banking services to individuals, businesses, and nonprofit organizations in western Washington, the United States. The company accepts various deposit instruments, including checking, money market deposit, savings, and transaction accounts, as well as certificates of deposit. It also originates one- to four-family mortgage loans, commercial and multi-family real estate loans, construction and land loans, and commercial business loans, as well as consumer loans primarily consisting of automobile loans, and home-equity loans and lines of credit. First Northwest Bancorp operates branch offices in Clallam, Jefferson, King, Kitsap, and Whatcom Counties, Washington. First Northwest Bancorp was founded in 1923 and is based in Port Angeles, Washington.

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.