Analyzing Northwest Bancshares (NASDAQ:NWBI) and Old Point Financial (NASDAQ:OPOF)

Northwest Bancshares (NASDAQ:NWBIGet Rating) and Old Point Financial (NASDAQ:OPOFGet Rating) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Valuation and Earnings

This table compares Northwest Bancshares and Old Point Financial’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northwest Bancshares $561.40 million 2.76 $154.32 million $1.11 11.00
Old Point Financial $57.14 million 2.14 $8.44 million $1.42 16.93

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

Profitability

This table compares Northwest Bancshares and Old Point Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northwest Bancshares 26.19% 9.12% 0.99%
Old Point Financial 13.32% 6.35% 0.57%

Risk and Volatility

Northwest Bancshares has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500. Comparatively, Old Point Financial has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Insider and Institutional Ownership

61.2% of Northwest Bancshares shares are owned by institutional investors. Comparatively, 32.6% of Old Point Financial shares are owned by institutional investors. 1.0% of Northwest Bancshares shares are owned by company insiders. Comparatively, 16.2% of Old Point Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Northwest Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 6.6%. Old Point Financial pays an annual dividend of $0.52 per share and has a dividend yield of 2.2%. Northwest Bancshares pays out 72.1% of its earnings in the form of a dividend. Old Point Financial pays out 36.6% 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. Northwest Bancshares has raised its dividend for 13 consecutive years and Old Point Financial has raised its dividend for 1 consecutive years. Northwest Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current recommendations for Northwest Bancshares and Old Point Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northwest Bancshares 1 3 0 0 1.75
Old Point Financial 0 0 0 0 N/A

Northwest Bancshares presently has a consensus price target of $13.01, indicating a potential upside of 6.52%. Given Northwest Bancshares’ higher possible upside, analysts clearly believe Northwest Bancshares is more favorable than Old Point Financial.

Summary

Northwest Bancshares beats Old Point Financial on 10 of the 15 factors compared between the two stocks.

Northwest Bancshares Company Profile (Get Rating)

Northwest Bancshares, Inc. operates as the holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans and loans collateralized by multi-family residential and commercial real estate; commercial business loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by deposit accounts. The company also offers investment management and trust services. As of December 31, 2021, it operated 170 community-banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.

Old Point Financial Company Profile (Get Rating)

Old Point Financial Corporation operates as the bank holding company for The Old Point National Bank of Phoebus that provides consumer, mortgage, and business banking services for individual and commercial customers in Virginia. The company offers deposit products, including interest-bearing transaction accounts, money market deposit accounts, savings accounts, time deposits, and demand deposits. It also provides real estate construction, commercial, and mortgage loans, such as residential 1-4 family mortgages, multi-family and second mortgages, and equity lines of credit; and other loans, as well as cash management services. In addition, the company offers retirement planning, estate planning, financial planning, estate and trust administration, retirement plan administration, tax, and investment management services; and insurance products and wealth management services. It operates 14 branches in the Hampton Roads localities of Hampton, Newport News, Norfolk, Virginia Beach, Chesapeake, Williamsburg/James City County, York County, and Isle of Wight County; a loan production office in Richmond, Virginia; and a mortgage loan origination office in Charlotte, North Carolina. The company was founded in 1922 and is headquartered in Hampton, Virginia.

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