Reviewing First Financial Northwest (NASDAQ:FFNW) and Premier Financial (NASDAQ:PFC)

First Financial Northwest (NASDAQ:FFNWGet Free Report) and Premier Financial (NASDAQ:PFCGet Free Report) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, profitability, earnings, valuation, analyst recommendations and dividends.

Dividends

First Financial Northwest pays an annual dividend of $0.52 per share and has a dividend yield of 2.5%. Premier Financial pays an annual dividend of $1.24 per share and has a dividend yield of 6.1%. First Financial Northwest pays out 76.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Premier Financial pays out 39.9% of its earnings in the form of a dividend. First Financial Northwest has increased its dividend for 7 consecutive years and Premier Financial has increased its dividend for 3 consecutive years. Premier Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares First Financial Northwest and Premier Financial’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Financial Northwest $80.93 million 2.33 $6.30 million $0.68 30.24
Premier Financial $456.36 million 1.59 $111.29 million $3.11 6.53

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for First Financial Northwest and Premier Financial, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Financial Northwest 0 2 1 0 2.33
Premier Financial 0 3 0 0 2.00

First Financial Northwest presently has a consensus target price of $23.00, indicating a potential upside of 11.87%. Premier Financial has a consensus target price of $23.00, indicating a potential upside of 13.30%. Given Premier Financial’s higher probable upside, analysts plainly believe Premier Financial is more favorable than First Financial Northwest.

Profitability

This table compares First Financial Northwest and Premier Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Financial Northwest 7.79% 3.95% 0.41%
Premier Financial 24.39% 9.76% 1.06%

Institutional and Insider Ownership

55.0% of First Financial Northwest shares are held by institutional investors. Comparatively, 66.1% of Premier Financial shares are held by institutional investors. 8.0% of First Financial Northwest shares are held by company insiders. Comparatively, 2.2% of Premier Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

First Financial Northwest has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Premier Financial has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500.

Summary

Premier Financial beats First Financial Northwest on 11 of the 17 factors compared between the two stocks.

About First Financial Northwest

(Get Free Report)

First Financial Northwest, Inc. operates as the bank holding company for First Financial Northwest Bank that provides commercial banking services in Washington. The company offers a range of deposit products, including noninterest bearing accounts, interest-bearing demand accounts, money market accounts, statement savings accounts, and certificates of deposit. Its loan products comprise one-to-four family residential loans; multifamily and commercial real estate loans; construction/land loans for the construction of single-family residences, condominiums, townhouses, multifamily properties, and residential developments; business loans; and consumer loans, such as home equity loans and savings account loans. The company also provides wealth management services; and online banking platform, as well as debit cards and ATMs. It operates retail branches in King County, Snohomish County, and Pierce County, Washington. The company was founded in 1923 and is headquartered in Renton, Washington.

About Premier Financial

(Get Free Report)

Premier Financial Corp., through its subsidiaries, provides various banking services. It offers demand, checking, money market, and savings accounts, as well as certificates of deposits and certificates of deposit account registry service; and investment products. The company also provides residential and commercial real estate, commercial, construction, home improvement and home equity, installment, and consumer loans. In addition, it invests in the U.S. treasury and federal government agency obligations, obligations of states and political subdivisions, mortgage-backed securities that are issued by federal agencies, residential collateralized mortgage obligations, and corporate bonds. Further, the company offers property and casualty, life, and group health insurance agency services; mezzanine funding services; and digital banking services, which include mobile banking, zelle, online bill pay, and online account opening, as well as the MoneyPass ATM network. It operates in Ohio, Michigan, Indiana, Pennsylvania, and West Virginia. The company was formerly known as First Defiance Financial Corp. and changed its name to Premier Financial Corp. in June 2020. Premier Financial Corp. was founded in 1920 and is headquartered in Defiance, Ohio.

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