Bank Of Montreal (NYSE:BMO) and Northeast Community Bancorp (NASDAQ:NECB) Critical Comparison

Northeast Community Bancorp (NASDAQ:NECB) and Bank Of Montreal (NYSE:BMO) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, valuation, analyst recommendations, profitability, institutional ownership and risk.

Profitability

This table compares Northeast Community Bancorp and Bank Of Montreal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northeast Community Bancorp	27.67%	12.00%	2.05%
Bank Of Montreal	11.72%	13.60%	0.71%

Risk and Volatility

Northeast Community Bancorp has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, Bank Of Montreal has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Northeast Community Bancorp and Bank Of Montreal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northeast Community Bancorp	0	2	1	1	2.75
Bank Of Montreal	1	6	5	0	2.33

Northeast Community Bancorp currently has a consensus target price of $29.50, indicating a potential upside of 10.28%. Bank Of Montreal has a consensus target price of $163.00, indicating a potential downside of 5.96%. Given Northeast Community Bancorp’s stronger consensus rating and higher probable upside, equities analysts clearly believe Northeast Community Bancorp is more favorable than Bank Of Montreal.

Institutional & Insider Ownership

53.2% of Northeast Community Bancorp shares are owned by institutional investors. Comparatively, 45.8% of Bank Of Montreal shares are owned by institutional investors. 7.1% of Northeast Community Bancorp shares are owned by company insiders. Comparatively, 1.0% of Bank Of Montreal shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Northeast Community Bancorp and Bank Of Montreal”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Community Bancorp	$103.62 million	3.55	$44.41 million	$3.12	8.57
Bank Of Montreal	$38.50 billion	3.13	$6.22 billion	$8.86	19.56

Bank Of Montreal has higher revenue and earnings than Northeast Community Bancorp. Northeast Community Bancorp is trading at a lower price-to-earnings ratio than Bank Of Montreal, indicating that it is currently the more affordable of the two stocks.

Dividends

Northeast Community Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. Bank Of Montreal pays an annual dividend of $4.93 per share and has a dividend yield of 2.8%. Northeast Community Bancorp pays out 32.1% of its earnings in the form of a dividend. Bank Of Montreal pays out 55.6% 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. Northeast Community Bancorp has raised its dividend for 2 consecutive years and Bank Of Montreal has raised its dividend for 4 consecutive years. Northeast Community Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Northeast Community Bancorp beats Bank Of Montreal on 10 of the 18 factors compared between the two stocks.

About Northeast Community Bancorp

Northeast Community Bancorp, Inc. operates as the holding company for NorthEast Community Bank that provides financial services for individuals and businesses. It accepts various deposit instruments, including checking accounts, money market accounts, regular savings accounts, and non-interest bearing demand accounts, as well as certificates of deposits. The company also offers construction, commercial and industrial, multifamily and mixed-use real estate, non-residential real estate loans, and consumer loans. In addition, it invests in various types of liquid assets, including U.S. Treasury obligations, municipal securities, deposits at the Federal Home Loan Bank of New York, and certificates of deposit of federally insured institutions, as well as securities of various federal agencies, and of state and municipal governments. Further, the company offers financial planning and investment advisory services; and life insurance products and fixed-rate annuities. It operates full-service branches located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts; and loan production offices located in White Plains, New York, and New City counties in New York and Danvers, Massachusetts. Northeast Community Bancorp, Inc. was founded in 1934 and is headquartered in White Plains, New York.

About Bank Of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.