Reviewing Broadway Financial (NASDAQ:BYFC) & Northpointe Bancshares (NYSE:NPB)

Northpointe Bancshares (NYSE:NPB) and Broadway Financial (NASDAQ:BYFC) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Profitability

This table compares Northpointe Bancshares and Broadway Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northpointe Bancshares	16.09%	12.43%	1.16%
Broadway Financial	3.18%	1.46%	0.15%

Analyst Ratings

This is a summary of recent ratings for Northpointe Bancshares and Broadway Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northpointe Bancshares	1	1	2	0	2.25
Broadway Financial	1	0	0	0	1.00

Northpointe Bancshares presently has a consensus price target of $19.08, suggesting a potential upside of 5.73%. Given Northpointe Bancshares’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Northpointe Bancshares is more favorable than Broadway Financial.

Institutional and Insider Ownership

12.1% of Broadway Financial shares are held by institutional investors. 18.4% of Northpointe Bancshares shares are held by insiders. Comparatively, 4.1% of Broadway Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Northpointe Bancshares and Broadway Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northpointe Bancshares	$390.45 million	1.59	$55.16 million	$1.57	11.50
Broadway Financial	$63.76 million	1.18	$1.93 million	($0.13)	-63.08

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

Summary

Northpointe Bancshares beats Broadway Financial on 12 of the 13 factors compared between the two stocks.

About Northpointe Bancshares

Northpointe Bancshares, Inc. operates as a bank holding company. It offers a nationwide mortgage purchase program, residential mortgage loans, digital deposit banking to retail customers and custodial deposit services. The company was founded by Charles A. Williams in 1998 and is headquartered in Grand Rapids, MI.

About Broadway Financial

Broadway Financial Corporation operates as the holding company for City First Bank, National Association that provides various banking products and services in the United States. It accepts various deposit accounts, including savings accounts, checking accounts, interest checking accounts, money market accounts, and fixed-term certificates of deposit. The company also offers mortgage loans, which are secured by multi-family residential properties; single family residential properties; and commercial real estate, including charter schools, community facilities, and churches, as well as commercial business, construction, and consumer loans. In addition, it invests in securities issued by federal government agencies, residential mortgage-backed securities, and other investments. The company was founded in 1946 and is headquartered in Los Angeles, California.