Analyzing Flushing Financial (NASDAQ:FFIC) and Franklin Financial Services (NASDAQ:FRAF)

Flushing Financial (NASDAQ:FFIC) and Franklin Financial Services (NASDAQ:FRAF) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Profitability

This table compares Flushing Financial and Franklin Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flushing Financial	7.37%	4.11%	0.32%
Franklin Financial Services	14.84%	11.10%	0.76%

Valuation & Earnings

This table compares Flushing Financial and Franklin Financial Services’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flushing Financial	$201.74 million	1.78	$28.66 million	$1.05	11.74
Franklin Financial Services	$67.25 million	1.70	$13.60 million	$3.10	8.39

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

Institutional & Insider Ownership

67.1% of Flushing Financial shares are held by institutional investors. Comparatively, 24.8% of Franklin Financial Services shares are held by institutional investors. 5.5% of Flushing Financial shares are held by insiders. Comparatively, 6.9% of Franklin Financial Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Flushing Financial has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Franklin Financial Services has a beta of 0.42, suggesting that its share price is 58% less volatile than the S&P 500.

Dividends

Flushing Financial pays an annual dividend of $0.88 per share and has a dividend yield of 7.1%. Franklin Financial Services pays an annual dividend of $1.28 per share and has a dividend yield of 4.9%. Flushing Financial pays out 83.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Franklin Financial Services pays out 41.3% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent recommendations for Flushing Financial and Franklin Financial Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flushing Financial	0	2	1	0	2.33
Franklin Financial Services	0	0	0	0	N/A

Flushing Financial presently has a consensus target price of $16.50, indicating a potential upside of 33.82%. Given Flushing Financial’s higher possible upside, equities analysts plainly believe Flushing Financial is more favorable than Franklin Financial Services.

Summary

Flushing Financial beats Franklin Financial Services on 9 of the 15 factors compared between the two stocks.

About Flushing Financial

Flushing Financial Corporation operates as the bank holding company for Flushing Bank that provides banking products and services primarily to consumers, businesses, and governmental units. It offers various deposit products, including checking and savings accounts, money market accounts, demand accounts, NOW accounts, and certificates of deposit. The company also provides mortgage loans secured by multi-family residential, commercial real estate, one-to-four family mixed-use property, one-to-four family residential property, and commercial business loans; construction loans; small business administration loans and other small business loans; mortgage loan surrogates, such as mortgage-backed securities; and consumer loans, including overdraft lines of credit, as well as the United States government securities, corporate fixed-income securities, and other marketable securities. In addition, it offers banking services to public municipalities comprising counties, cities, towns, villages, school districts, libraries, fire districts, and various courts. Further, the company operates an internet branch under the iGObanking and BankPurely brands. Flushing Financial Corporation was founded in 1929 and is based in Uniondale, New York.

About Franklin Financial Services

Franklin Financial Services Corporation operates as the bank holding company for Farmers and Merchants Trust Company of Chambersburg that provides commercial, retail banking, and trust services to small and medium-sized businesses, individuals, governmental entities, and non-profit organizations in Pennsylvania. It offers various deposit products, including checking, savings, money management, and time deposit accounts, as well as demand deposits. The company also provides commercial real estate, construction and land development, agricultural, commercial and industrial, and residential mortgage loans, as well as installment and revolving loans to consumers; and secured and unsecured commercial and industrial loans, including accounts receivable and inventory financing, and commercial equipment financing. In addition, it offers various investment and trust services comprising estate planning and administration, corporate and personal trust fund management, pension, and profit sharing and other employee benefit funds management services, as well as custodial services; sells mutual funds, annuities, and insurance products; and offers safe deposit facilities and fiduciary services. Further, the company, through its subsidiary, Franklin Future Fund Inc., operates as a non-bank investment company that makes venture capital investments. The company was founded in 1906 and is headquartered in Chambersburg, Pennsylvania.