Popular (BPOP) vs. FS Bancorp (FSBW) Financial Review

FS Bancorp (NASDAQ: FSBW) and Popular (NASDAQ:BPOP) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Insider & Institutional Ownership

42.7% of FS Bancorp shares are held by institutional investors. Comparatively, 88.9% of Popular shares are held by institutional investors. 13.2% of FS Bancorp shares are held by company insiders. Comparatively, 1.3% of Popular shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for FS Bancorp and Popular, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FS Bancorp 0 1 2 0 2.67
Popular 1 2 7 0 2.60

FS Bancorp currently has a consensus target price of $46.33, indicating a potential downside of 15.09%. Popular has a consensus target price of $46.75, indicating a potential upside of 31.73%. Given Popular’s higher possible upside, analysts plainly believe Popular is more favorable than FS Bancorp.

Profitability

This table compares FS Bancorp and Popular’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FS Bancorp 19.04% 13.93% 1.43%
Popular 9.98% 5.70% 0.73%

Dividends

FS Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 0.8%. Popular pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. FS Bancorp pays out 10.5% of its earnings in the form of a dividend. Popular pays out 50.8% 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.

Risk & Volatility

FS Bancorp has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, Popular has a beta of 1.31, suggesting that its stock price is 31% more volatile than the S&P 500.

Earnings & Valuation

This table compares FS Bancorp and Popular’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FS Bancorp $61.59 million 3.25 $10.49 million $4.19 13.02
Popular $1.93 billion 1.87 $216.69 million $1.97 18.02

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

About FS Bancorp

FS Bancorp, Inc. is a holding company for 1st Security Bank of Washington (the Bank). The Company is a diversified lender with a focus on the origination of indirect home improvement loans, also referred to as fixture secured loans, commercial real estate mortgage loans, home loans, commercial business loans and second mortgage and home equity loan products. The Company operates through the community banking segment. The Bank is a relationship-driven community bank. The Bank offers banking and financial services to local families, local and regional businesses and various industries within distinct Puget Sound area communities. It offers a range of commercial real estate loans, which are secured by income producing properties, including retail centers, warehouses and office buildings located in the market areas. It offers a range of deposit instruments, including checking accounts, money market deposit accounts, savings accounts and certificates of deposit.

About Popular

Popular, Inc. (Popular) is a financial holding company. The Company operates in two segments: Banco Popular de Puerto Rico (BPPR), which includes its Puerto Rico business, and Banco Popular North America (BPNA), which includes its the United States mainland business. The Company has operations in Puerto Rico, the United States and the Caribbean. The Company’s BPPR segment provides retail, mortgage and commercial banking services through its banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. The Company’s BPNA segment consists of Popular North America, Inc. (PNA) functioning as the holding company for its operations in the United States. It also operates PNA’s subsidiary, E-LOAN, Inc. The banking operations of BPNA in the United States mainland are based in New York, Florida and New Jersey, conducted under the name of Popular Community Bank.

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