Contrasting Capitol Federal Financial (NASDAQ:CFFN) and Northpointe Bancshares (NYSE:NPB)

Northpointe Bancshares (NYSE:NPB) and Capitol Federal Financial (NASDAQ:CFFN) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Institutional and Insider Ownership

88.5% of Capitol Federal Financial shares are owned by institutional investors. 18.3% of Northpointe Bancshares shares are owned by company insiders. Comparatively, 2.8% of Capitol Federal Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Northpointe Bancshares and Capitol Federal Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northpointe Bancshares	17.72%	14.99%	1.25%
Capitol Federal Financial	18.69%	8.01%	0.85%

Dividends

Northpointe Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 4.1%. Northpointe Bancshares pays out 4.3% of its earnings in the form of a dividend. Capitol Federal Financial pays out 52.3% 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.

Analyst Ratings

This is a breakdown of current ratings and target prices for Northpointe Bancshares and Capitol Federal Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northpointe Bancshares	1	2	2	0	2.20
Capitol Federal Financial	0	3	1	1	2.60

Northpointe Bancshares currently has a consensus price target of $20.42, suggesting a potential upside of 28.65%. Capitol Federal Financial has a consensus price target of $9.25, suggesting a potential upside of 10.25%. Given Northpointe Bancshares’ higher possible upside, equities analysts clearly believe Northpointe Bancshares is more favorable than Capitol Federal Financial.

Risk and Volatility

Northpointe Bancshares has a beta of 0.16, indicating that its stock price is 84% less volatile than the S&P 500. Comparatively, Capitol Federal Financial has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Earnings and Valuation

This table compares Northpointe Bancshares and Capitol Federal Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northpointe Bancshares	$471.18 million	1.16	$83.41 million	$2.31	6.87
Capitol Federal Financial	$420.24 million	2.51	$68.03 million	$0.65	12.91

Northpointe Bancshares has higher revenue and earnings than Capitol Federal Financial. Northpointe Bancshares is trading at a lower price-to-earnings ratio than Capitol Federal Financial, indicating that it is currently the more affordable of the two stocks.

Summary

Northpointe Bancshares beats Capitol Federal Financial on 9 of the 17 factors compared between the two stocks.

About Northpointe Bancshares

Northpointe Bancshares, Inc. operates as a bank holding company. It offers a nationwide mortgage purchase program, residential mortgage loans, digital deposit banking to retail customers and custodial deposit services. The company was founded by Charles A. Williams in 1998 and is headquartered in Grand Rapids, MI.

About Capitol Federal Financial

Capitol Federal Financial, Inc. operates as the holding company for Capitol Federal Savings Bank that provides various retail banking products and services in the United States. The company accepts a range of deposit products, including savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposit. It also provides various loan products, such as one- to four-family residential real estate loans, commercial real estate, commercial and industrial, construction loans, and small business loans, as well as consumer loans, which include home equity loans and lines of credit, home improvement loans, vehicle loans, and loans secured by savings deposits. In addition, the company offers mobile, telephone, and online banking services, as well as bill payment services; credit cards; mortgage loan; operates a call center; and invests in various securities. The company serves the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia, and Salina, Kansas, and a portion of the metropolitan area of greater Kansas City. Capitol Federal Financial, Inc. was founded in 1893 and is headquartered in Topeka, Kansas.