Analyzing Bankwell Financial Group (BWFG) and Valley National Bancorp (VLY)

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

Dividends

Bankwell Financial Group pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. Valley National Bancorp pays an annual dividend of $0.44 per share and has a dividend yield of 3.5%. Bankwell Financial Group pays out 14.4% of its earnings in the form of a dividend. Valley National Bancorp pays out 75.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

49.3% of Bankwell Financial Group shares are held by institutional investors. Comparatively, 63.8% of Valley National Bancorp shares are held by institutional investors. 22.4% of Bankwell Financial Group shares are held by insiders. Comparatively, 3.1% of Valley National Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Bankwell Financial Group and Valley National Bancorp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bankwell Financial Group $63.67 million 4.16 $12.35 million $1.95 17.62
Valley National Bancorp $945.86 million 3.55 $161.90 million $0.58 21.88

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Bankwell Financial Group and Valley National Bancorp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bankwell Financial Group 0 0 1 0 3.00
Valley National Bancorp 0 3 4 0 2.57

Bankwell Financial Group presently has a consensus target price of $37.00, indicating a potential upside of 7.71%. Valley National Bancorp has a consensus target price of $13.75, indicating a potential upside of 8.35%. Given Valley National Bancorp’s higher probable upside, analysts plainly believe Valley National Bancorp is more favorable than Bankwell Financial Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Bankwell Financial Group 20.74% 9.92% 0.88%
Valley National Bancorp 17.08% 8.20% 0.80%

Volatility & Risk

Bankwell Financial Group has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Valley National Bancorp has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.

Bankwell Financial Group Company Profile

Bankwell Financial Group, Inc. is a bank holding company. The Company offers a range of financial services through its banking subsidiary, Bankwell Bank (the Bank). The Bank is a Connecticut state non-member bank. The Bank provides a range of banking services to commercial and consumer customers, concentrated in the Fairfield and New Haven Counties region of Connecticut. The Bank’s commercial lending products include owner-occupied commercial real estate loans, commercial real estate investment loans, commercial loans (such as business term loans, equipment financing and lines of credit) to small and mid-sized businesses, and real estate construction and development loans. The Bank’s retail lending products include residential mortgage loans, home equity lines of credit and consumer installment loans. Its depository products include checking, savings, money market, certificates of deposit, noninterest-bearing demand, negotiable order of withdrawal (NOW) and time deposits.

Valley National Bancorp Company Profile

Valley National Bancorp is the bank holding company for Valley National Bank (the Bank). The Bank provides a range of commercial, retail, insurance and wealth management financial services products. The Company’s segments include Consumer Lending, Commercial Lending, Investment Management, and Corporate and Other Adjustments. The Consumer Lending segment primarily includes residential mortgages, home equity loans and automobile loans. The Commercial Lending segment primarily includes floating rate and adjustable rate commercial and industrial loans, as well as fixed rate owner occupied and commercial real estate loans. The Investment Management segment includes the Company’s investments in various types of securities. As of July 26, 2017, the Bank operated 200 branch locations serving northern and central New Jersey, the New York City boroughs of Manhattan, Brooklyn, Queens and Long Island, and Florida.

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