Financial Review: Fidelity D&D Bancorp (NASDAQ:FDBC) & NewtekOne (NASDAQ:NEWT)

Fidelity D&D Bancorp (NASDAQ:FDBC) and NewtekOne (NASDAQ:NEWT) are both small-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Dividends

Fidelity D&D Bancorp pays an annual dividend of $1.60 per share and has a dividend yield of 3.8%. NewtekOne pays an annual dividend of $0.76 per share and has a dividend yield of 7.3%. Fidelity D&D Bancorp pays out 42.6% of its earnings in the form of a dividend. NewtekOne pays out 39.6% 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. Fidelity D&D Bancorp has raised its dividend for 10 consecutive years and NewtekOne has raised its dividend for 1 consecutive years. NewtekOne is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of current ratings for Fidelity D&D Bancorp and NewtekOne, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidelity D&D Bancorp	0	0	0	0	0.00
NewtekOne	0	4	0	0	2.00

NewtekOne has a consensus target price of $14.00, suggesting a potential upside of 33.84%. Given NewtekOne’s stronger consensus rating and higher probable upside, analysts clearly believe NewtekOne is more favorable than Fidelity D&D Bancorp.

Insider & Institutional Ownership

20.1% of Fidelity D&D Bancorp shares are held by institutional investors. Comparatively, 38.4% of NewtekOne shares are held by institutional investors. 21.0% of Fidelity D&D Bancorp shares are held by insiders. Comparatively, 6.5% of NewtekOne shares are held by 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.

Valuation & Earnings

This table compares Fidelity D&D Bancorp and NewtekOne”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidelity D&D Bancorp	$126.04 million	1.90	$20.79 million	$3.76	11.05
NewtekOne	$338.73 million	0.81	$50.85 million	$1.92	5.45

NewtekOne has higher revenue and earnings than Fidelity D&D Bancorp. NewtekOne is trading at a lower price-to-earnings ratio than Fidelity D&D Bancorp, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Fidelity D&D Bancorp has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, NewtekOne has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Profitability

This table compares Fidelity D&D Bancorp and NewtekOne’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fidelity D&D Bancorp	16.83%	10.62%	0.83%
NewtekOne	14.34%	18.81%	2.70%

Summary

NewtekOne beats Fidelity D&D Bancorp on 10 of the 16 factors compared between the two stocks.

About Fidelity D&D Bancorp

Fidelity D&D Bancorp, Inc. is a holding company, which engages in the provision of commercial banking services. It operates through the following segments: Commercial and Industrial, Commercial Real Estate, Consumer, and Residential Real Estate. The Commercial and Industrial segment refers to identified historic and/or the projected cash flows of the borrower and secondarily to the underlying collateral provided by the borrower. The Commercial Real Estate segment offers finances purchase of real estate, refinance existing obligations, and/or to provide capital. The Consumer segment includes home equity installment loans and lines of credit. The Residential Real Estate segment operates as a secured first lien position of the borrower’s residential real estate. The company was founded in 1902 and is headquartered in Dunmore, PA.

About NewtekOne

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that engages in the provision of various business and financial solutions under the Newtek brand name to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including SBA loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based Point of Sale systems for a various restaurant, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners. Further, the company provides website hosting, dedicated server hosting, cloud hosting, web design and development, internet marketing, ecommerce, data storage, backup and disaster recovery, and other related services, including consulting and implementing technology solutions for enterprise and commercial clients as well as SMBs. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, Florida.