Critical Contrast: Northeast Bancorp (NASDAQ:NBN) vs. Pathfinder Bancorp (NASDAQ:PBHC)

Northeast Bancorp (NASDAQ:NBN) and Pathfinder Bancorp (NASDAQ:PBHC) are both small-cap finance companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.

Volatility & Risk

Northeast Bancorp has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Pathfinder Bancorp has a beta of 0.16, suggesting that its share price is 84% less volatile than the S&P 500.

Valuation & Earnings

This table compares Northeast Bancorp and Pathfinder Bancorp”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Bancorp	$351.00 million	2.58	$83.44 million	$10.08	10.93
Pathfinder Bancorp	$87.92 million	0.83	$3.38 million	$0.35	43.27

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Northeast Bancorp	23.77%	19.19%	2.04%
Pathfinder Bancorp	2.98%	2.15%	0.18%

Analyst Recommendations

This is a summary of recent ratings and price targets for Northeast Bancorp and Pathfinder Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northeast Bancorp	0	1	0	0	2.00
Pathfinder Bancorp	0	0	0	0	0.00

Northeast Bancorp currently has a consensus target price of $115.00, suggesting a potential upside of 4.40%. Given Northeast Bancorp’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Northeast Bancorp is more favorable than Pathfinder Bancorp.

Dividends

Northeast Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Pathfinder Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.6%. Northeast Bancorp pays out 0.4% of its earnings in the form of a dividend. Pathfinder Bancorp pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pathfinder Bancorp has increased its dividend for 1 consecutive years. Pathfinder Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

26.7% of Pathfinder Bancorp shares are held by institutional investors. 14.2% of Northeast Bancorp shares are held by insiders. Comparatively, 22.4% of Pathfinder Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Northeast Bancorp beats Pathfinder Bancorp on 11 of the 16 factors compared between the two stocks.

About Northeast Bancorp

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.

About Pathfinder Bancorp

Pathfinder Bancorp, Inc. operates as a bank holding company for Pathfinder Bank that provides various banking and financial products and services in New York. The company's deposit products include checking, savings, and money market deposit accounts; certificates of deposit; and demand and time deposits. Its loan portfolio comprises commercial real estate, commercial, residential real estate, construction, and tax-exempt loans; home equity loans and junior liens; and consumer loans comprising automobile, recreational vehicles, and unsecured personal loans, as well as unsecured lines of credit and loans secured by deposit accounts. The company is also involved in the property, casualty, and life insurance brokerage business. It primarily serves individuals, families, small to mid-size businesses, and municipalities. The company was founded in 1859 and is headquartered in Oswego, New York.