Financial Review: Flagstar Bank, National Association (NYSE:FLG) & National Bankshares (NASDAQ:NKSH)

Flagstar Bank, National Association (NYSE:FLG) and National Bankshares (NASDAQ:NKSH) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Profitability

This table compares Flagstar Bank, National Association and National Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flagstar Bank, National Association	1.08%	0.98%	0.08%
National Bankshares	23.22%	10.66%	1.09%

Volatility and Risk

Flagstar Bank, National Association has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, National Bankshares has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Flagstar Bank, National Association and National Bankshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flagstar Bank, National Association	1	3	9	0	2.62
National Bankshares	0	0	1	1	3.50

Flagstar Bank, National Association presently has a consensus price target of $16.79, indicating a potential upside of 24.80%. Given Flagstar Bank, National Association’s higher possible upside, analysts plainly believe Flagstar Bank, National Association is more favorable than National Bankshares.

Earnings and Valuation

This table compares Flagstar Bank, National Association and National Bankshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flagstar Bank, National Association	$2.09 billion	2.67	-$177.00 million	$0.03	448.50
National Bankshares	$85.32 million	3.03	$15.83 million	$3.18	12.76

National Bankshares has lower revenue, but higher earnings than Flagstar Bank, National Association. National Bankshares is trading at a lower price-to-earnings ratio than Flagstar Bank, National Association, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

67.9% of Flagstar Bank, National Association shares are held by institutional investors. Comparatively, 29.7% of National Bankshares shares are held by institutional investors. 21.4% of Flagstar Bank, National Association shares are held by insiders. Comparatively, 3.3% of National Bankshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Flagstar Bank, National Association pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. National Bankshares pays an annual dividend of $1.50 per share and has a dividend yield of 3.7%. Flagstar Bank, National Association pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Bankshares pays out 47.2% of its earnings in the form of a dividend. National Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

National Bankshares beats Flagstar Bank, National Association on 10 of the 17 factors compared between the two stocks.

About Flagstar Bank, National Association

Flagstar Financial, Inc. operates as the bank holding company for Flagstar Bank, N.A. that provides banking products and services in the United States. The company’s deposit products include interest-bearing checking and money market, savings, non-interest-bearing, and retirement accounts, as well as certificates of deposit. Its loan products comprise multi-family loans; commercial real estate loans; acquisition, development, and construction loans; commercial and industrial loans; one-to-four family loans; specialty finance loans and leases; warehouse loans; and other loans, such as home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans, and other consumer loans, including overdraft loans. The company offers cash management products; non-deposit investment and insurance products; and online banking, mobile banking, and bank-by-phone services. It primarily serves individuals, small and mid-size businesses, and professional associations. The company was formerly known as New York Community Bancorp, Inc. and changed its name to Flagstar Financial, Inc. in October 2024. Flagstar Financial, Inc. was founded in 1859 and is headquartered in Hicksville, New York.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.