Financial Analysis: Norwood Financial (NASDAQ:NWFL) versus First Mid Bancshares (NASDAQ:FMBH)

Norwood Financial (NASDAQ:NWFLGet Free Report) and First Mid Bancshares (NASDAQ:FMBHGet Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their institutional ownership, earnings, profitability, analyst recommendations, dividends, valuation and risk.

Valuation & Earnings

This table compares Norwood Financial and First Mid Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Norwood Financial $70.19 million 3.29 $16.76 million $2.07 13.77
First Mid Bancshares $386.95 million 1.96 $68.93 million $3.17 10.03

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

Volatility and Risk

Norwood Financial has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, First Mid Bancshares has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.

Dividends

Norwood Financial pays an annual dividend of $1.20 per share and has a dividend yield of 4.2%. First Mid Bancshares pays an annual dividend of $0.92 per share and has a dividend yield of 2.9%. Norwood Financial pays out 58.0% of its earnings in the form of a dividend. First Mid Bancshares pays out 29.0% 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. Norwood Financial has increased its dividend for 6 consecutive years. Norwood Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings for Norwood Financial and First Mid Bancshares, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Norwood Financial 0 0 0 0 N/A
First Mid Bancshares 0 0 4 0 3.00

First Mid Bancshares has a consensus target price of $36.50, indicating a potential upside of 14.74%. Given First Mid Bancshares’ higher possible upside, analysts plainly believe First Mid Bancshares is more favorable than Norwood Financial.

Profitability

This table compares Norwood Financial and First Mid Bancshares’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Norwood Financial 16.17% 9.64% 0.78%
First Mid Bancshares 17.82% 10.71% 1.06%

Institutional and Insider Ownership

28.1% of Norwood Financial shares are owned by institutional investors. Comparatively, 47.6% of First Mid Bancshares shares are owned by institutional investors. 9.1% of Norwood Financial shares are owned by company insiders. Comparatively, 5.2% of First Mid Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

First Mid Bancshares beats Norwood Financial on 11 of the 16 factors compared between the two stocks.

About Norwood Financial

(Get Free Report)

Norwood Financial Corp. operates as the bank holding company for Wayne Bank that provides various banking products and services. The company accepts a range of deposit products, including interest-bearing and non-interest-bearing transaction accounts, and statement savings and money market accounts, as well as certificate of deposits. It also provides commercial loans comprising lines of credit, revolving credit, term loans, mortgages, secured lending products, and letter of credit facilities; municipal finance lending; construction loans for commercial construction projects and single-family residences; land loans; construction financing; consumer loans; mortgage lending to finance principal residences and second home dwellings; and indirect dealer financing of new and used automobiles, boats, and recreational vehicles. In addition, the company offers investment securities services; personal and business credit services; trust and investment products; and cash management, direct deposit, remote deposit capture, mobile deposit capture, automated clearing house activity, real estate settlement, and Internet and mobile banking services. Further, it engages in the annuity and mutual fund sale, and discount brokerage activities, as well as insurance agency business. The company serves consumers, businesses, nonprofit organizations, and municipalities. It operates branches in Northeastern Pennsylvania; and in Delaware, Sullivan, Ontario, Otsego, and Yates Counties, New York, as well as automated teller machines. Norwood Financial Corp. was founded in 1870 and is headquartered in Honesdale, Pennsylvania.

About First Mid Bancshares

(Get Free Report)

First Mid Bancshares, Inc., a financial holding company, provides community banking products and services to commercial, retail, and agricultural customers in the United States. It accepts various deposit products, such as demand deposits, savings accounts, money market deposits, and time deposits. The company's loan products include commercial real estate, commercial and industrial, agricultural and agricultural real estate, residential real estate, and consumer loans, as well as construction and land development, 1-4 family residential properties, and multifamily residential properties loans; and other loans comprising loans to municipalities to support community projects, such as infrastructure improvements or equipment purchases. It also offers wealth management services, which include estate planning, investment, and farm management and brokerage services for individuals; employee benefit services for businesses; and farm management and brokerage services. In addition, the company provides property and casualty, senior insurance products, and group medical insurance for businesses; and personal lines insurance to individuals. The company was formerly known as First Mid-Illinois Bancshares, Inc. and changed its name to First Mid Bancshares, Inc. in April 2019. First Mid Bancshares, Inc. was founded in 1865 and is headquartered in Mattoon, Illinois.

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