Head-To-Head Analysis: Bankwell Financial Group (NASDAQ:BWFG) & Capital Bancorp (NASDAQ:CBNK)

Bankwell Financial Group (NASDAQ:BWFG) and Capital Bancorp (NASDAQ:CBNK) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitability, institutional ownership, dividends and valuation.

Insider & Institutional Ownership

35.8% of Bankwell Financial Group shares are held by institutional investors. Comparatively, 56.1% of Capital Bancorp shares are held by institutional investors. 21.0% of Bankwell Financial Group shares are held by company insiders. Comparatively, 33.5% of Capital Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Bankwell Financial Group has a beta of 0.62, meaning that its stock price is 38% less volatile than the S&P 500. Comparatively, Capital Bancorp has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500.

Earnings & Valuation

This table compares Bankwell Financial Group and Capital Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bankwell Financial Group	$207.71 million	1.94	$35.20 million	$4.44	11.39
Capital Bancorp	$241.19 million	2.12	$57.17 million	$3.40	9.23

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

Analyst Ratings

This is a summary of current ratings and recommmendations for Bankwell Financial Group and Capital Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bankwell Financial Group	0	2	2	0	2.50
Capital Bancorp	0	2	3	0	2.60

Bankwell Financial Group presently has a consensus price target of $52.00, indicating a potential upside of 2.85%. Capital Bancorp has a consensus price target of $34.67, indicating a potential upside of 10.51%. Given Capital Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Capital Bancorp is more favorable than Bankwell Financial Group.

Dividends

Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.6%. Capital Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.5%. Bankwell Financial Group pays out 18.0% of its earnings in the form of a dividend. Capital Bancorp pays out 14.1% 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. Capital Bancorp has raised its dividend for 3 consecutive years.

Profitability

This table compares Bankwell Financial Group and Capital Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bankwell Financial Group	18.71%	13.53%	1.21%
Capital Bancorp	18.44%	14.56%	1.64%

Summary

Capital Bancorp beats Bankwell Financial Group on 12 of the 17 factors compared between the two stocks.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.