Comparing Eastern Bankshares (NASDAQ:EBC) & Norwood Financial (NASDAQ:NWFL)

Eastern Bankshares (NASDAQ:EBC) and Norwood Financial (NASDAQ:NWFL) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Earnings and Valuation

This table compares Eastern Bankshares and Norwood Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eastern Bankshares	$1.09 billion	3.17	$119.56 million	($0.65)	-24.85
Norwood Financial	$101.43 million	2.32	-$160,000.00	$0.09	282.89

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

Insider and Institutional Ownership

71.7% of Eastern Bankshares shares are held by institutional investors. Comparatively, 28.1% of Norwood Financial shares are held by institutional investors. 1.1% of Eastern Bankshares shares are held by company insiders. Comparatively, 9.1% of Norwood Financial shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Eastern Bankshares has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, Norwood Financial has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

Dividends

Eastern Bankshares pays an annual dividend of $0.52 per share and has a dividend yield of 3.2%. Norwood Financial pays an annual dividend of $1.24 per share and has a dividend yield of 4.9%. Eastern Bankshares pays out -80.0% of its earnings in the form of a dividend. Norwood Financial pays out 1,377.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eastern Bankshares has increased its dividend for 5 consecutive years and Norwood Financial has increased its dividend for 7 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 breakdown of current ratings and recommmendations for Eastern Bankshares and Norwood Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eastern Bankshares	0	1	1	0	2.50
Norwood Financial	0	2	1	0	2.33

Eastern Bankshares currently has a consensus target price of $19.25, suggesting a potential upside of 19.20%. Norwood Financial has a consensus target price of $28.50, suggesting a potential upside of 11.94%. Given Eastern Bankshares’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Eastern Bankshares is more favorable than Norwood Financial.

Profitability

This table compares Eastern Bankshares and Norwood Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eastern Bankshares	-15.56%	6.42%	0.91%
Norwood Financial	1.12%	8.35%	0.74%

Summary

Eastern Bankshares beats Norwood Financial on 9 of the 16 factors compared between the two stocks.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.

About Norwood Financial

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.