Financial Analysis: Penns Woods Bancorp (NASDAQ:PWOD) and Northeast Bank (NASDAQ:NBN)

Penns Woods Bancorp (NASDAQ:PWOD) and Northeast Bank (NASDAQ:NBN) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, analyst recommendations, dividends, institutional ownership, earnings, risk and valuation.

Analyst Recommendations

This is a breakdown of current ratings for Penns Woods Bancorp and Northeast Bank, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Penns Woods Bancorp	0	0	0	0	0.00
Northeast Bank	0	1	1	0	2.50

Northeast Bank has a consensus target price of $91.00, indicating a potential downside of 7.57%. Given Northeast Bank’s stronger consensus rating and higher possible upside, analysts clearly believe Northeast Bank is more favorable than Penns Woods Bancorp.

Volatility & Risk

Penns Woods Bancorp has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500. Comparatively, Northeast Bank has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500.

Valuation and Earnings

This table compares Penns Woods Bancorp and Northeast Bank”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Penns Woods Bancorp	$99.97 million	2.43	$16.61 million	$2.64	12.23
Northeast Bank	$155.77 million	N/A	$58.23 million	$7.70	12.79

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

Dividends

Penns Woods Bancorp pays an annual dividend of $1.28 per share and has a dividend yield of 4.0%. Northeast Bank pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Penns Woods Bancorp pays out 48.5% of its earnings in the form of a dividend. Northeast Bank pays out 0.5% 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.

Profitability

This table compares Penns Woods Bancorp and Northeast Bank’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Penns Woods Bancorp	16.79%	9.95%	0.88%
Northeast Bank	21.94%	N/A	N/A

Insider and Institutional Ownership

27.9% of Penns Woods Bancorp shares are owned by institutional investors. 4.0% of Penns Woods Bancorp shares are owned by insiders. Comparatively, 14.2% of Northeast Bank shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Northeast Bank beats Penns Woods Bancorp on 11 of the 15 factors compared between the two stocks.

About Penns Woods Bancorp

Penns Woods Bancorp, Inc. operates as the bank holding company for Jersey Shore State Bank, which provides commercial and retail banking services to individuals, partnerships, non-profit organizations, and corporations. It accepts time, demand, and savings deposits, including super NOW accounts, statement savings accounts, money market accounts, and certificates of deposit, as well as checking and individual retirement account (IRAs) accounts. The company also offers loan products comprising residential, commercial, and construction real estate loans; agricultural loans for the purchase or improvement of real estate; commercial loans for the acquisition and improvement of real estate, purchase of equipment, and working capital purposes; letters of credit; consumer loans, such as construction and residential mortgages, home equity loans and lines, automobile financing, personal loans and lines of credit, and overdraft and check lines; and revolving credit loans with overdraft protection. In addition, it provides securities brokerage and financial planning services, which include the sale of life insurance products, annuities, and estate planning services; property and casualty, and auto insurance products; safe deposit services; ATM services; and Internet and telephone banking services. Further, the company engages in real estate transactions and investment activities. It operates through a network of offices located in Clinton, Lycoming, Centre, Montour, Union, Blair, and Luzerne Counties, Pennsylvania. Penns Woods Bancorp, Inc. was founded in 1934 and is headquartered in Williamsport, Pennsylvania.

About Northeast Bank

Northeast Bank provides banking services to individual and corporate customers in Maine. The company's deposit products include demand deposit, NOW, money market, savings, certificate of deposit, and individual retirement accounts, as well as checking accounts. Its loan portfolio comprises residential mortgage loans; multi-family and other commercial real estate loans; commercial and industrial loans, such as term loans, lines of credit and equipment, and receivables financing; consumer loans comprising mobile home and overdraft, and deposit-secured loans; and small business administration loans. In addition, the company offers telephone banking, online banking and bill payment, mobile banking, cash management, and remote deposit capture services, as well as debit and credit card, ATM, electronic transfer, and check services. Further, it provides various services, such as money market, merchant, and payroll and HR. Northeast Bank was founded in 1872 and is headquartered in Portland, Maine.