Head-To-Head Comparison: Waterstone Financial (NASDAQ:WSBF) vs. Flushing Financial (NASDAQ:FFIC)

Waterstone Financial (NASDAQ:WSBF) and Flushing Financial (NASDAQ:FFIC) are both small-cap finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Profitability

This table compares Waterstone Financial and Flushing Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Waterstone Financial	10.47%	6.07%	0.93%
Flushing Financial	-7.13%	4.45%	0.35%

Volatility & Risk

Waterstone Financial has a beta of 0.75, suggesting that its share price is 25% less volatile than the S&P 500. Comparatively, Flushing Financial has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Dividends

Waterstone Financial pays an annual dividend of $0.60 per share and has a dividend yield of 4.0%. Flushing Financial pays an annual dividend of $0.88 per share and has a dividend yield of 6.2%. Waterstone Financial pays out 52.6% of its earnings in the form of a dividend. Flushing Financial pays out -73.9% 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. Flushing Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider & Institutional Ownership

62.7% of Waterstone Financial shares are owned by institutional investors. Comparatively, 67.1% of Flushing Financial shares are owned by institutional investors. 8.3% of Waterstone Financial shares are owned by company insiders. Comparatively, 5.7% of Flushing Financial shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Waterstone Financial and Flushing Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Waterstone Financial	$202.47 million	1.40	$18.69 million	$1.14	13.31
Flushing Financial	$484.72 million	0.99	-$31.33 million	($1.19)	-11.92

Waterstone Financial has higher earnings, but lower revenue than Flushing Financial. Flushing Financial is trading at a lower price-to-earnings ratio than Waterstone Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for Waterstone Financial and Flushing Financial, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Waterstone Financial	0	0	0	0	0.00
Flushing Financial	0	1	0	0	2.00

Summary

Waterstone Financial beats Flushing Financial on 8 of the 14 factors compared between the two stocks.

About Waterstone Financial

Waterstone Financial, Inc. operates as a bank holding company for WaterStone Bank SSB that provides various financial services to customers in southeastern Wisconsin, the United States. It operates in two segments, Community Banking and Mortgage Banking. The Community Banking segment offers consumer and business banking products and services, such as deposit and transactional solutions, including checking accounts, online banking and bill pay services, money transfer services, as well as credit, debit, and pre-paid cards; investable funds solutions comprising savings, money market deposits, individual retirement accounts, and certificates of deposit; residential mortgages, home equity loans and lines of credit, personal and installment loans, real estate financing, business loans, and business lines of credit; and fixed and variable annuities, insurance products, and trust and investment management accounts. It also provides transaction deposits, interest bearing transaction accounts, demand deposits, non-interest-bearing demand accounts, and time deposits; secured and unsecured lines; commercial real estate construction loans; term loans for working capital, inventory, and general corporate use; and personal term loans and investment services. The Mortgage Banking segment offers residential mortgage loans for the purpose of sale in the secondary market. It also invests in a portfolio of securities include mortgage-backed securities, government-sponsored and private-label enterprise bonds, collateralized mortgage and municipal obligations, and other debt securities. The company was formerly known as Wauwatosa Holdings, Inc. and changed its name to Waterstone Financial, Inc. in August 2008. The company was founded in 1921 and is based in Wauwatosa, Wisconsin.

About Flushing Financial

Flushing Financial Corporation operates as the bank holding company for Flushing Bank that provides banking products and services primarily to consumers, businesses, and governmental units. It offers various deposit products, including checking and savings accounts, money market accounts, non-interest bearing demand accounts, NOW accounts, and certificates of deposit. The company also provides mortgage loans secured by multi-family residential, commercial real estate, one-to-four family mixed-use property, one-to-four family residential property, and commercial business loans; construction loans; small business administration loans and other small business loans; mortgage loan surrogates, such as mortgage-backed securities; and consumer loans, including overdraft lines of credit, as well as the United States government securities, corporate fixed-income securities, and other marketable securities. It operates full-service banking offices in Queens, Nassau, Suffolk, Kings, and New York counties, New York; and an internet branch under the iGObanking and BankPurely brands. Flushing Financial Corporation was founded in 1929 and is based in Uniondale, New York.