Contrasting Salisbury Bancorp (SAL) and BankFinancial (BFIN)

Salisbury Bancorp (NASDAQ: SAL) and BankFinancial (NASDAQ:BFIN) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Profitability

This table compares Salisbury Bancorp and BankFinancial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Salisbury Bancorp 14.93% 8.16% 0.80%
BankFinancial 16.70% 6.63% 0.82%

Insider and Institutional Ownership

9.2% of Salisbury Bancorp shares are held by institutional investors. Comparatively, 62.1% of BankFinancial shares are held by institutional investors. 13.0% of Salisbury Bancorp shares are held by insiders. Comparatively, 15.5% of BankFinancial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Salisbury Bancorp and BankFinancial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Salisbury Bancorp 0 0 1 0 3.00
BankFinancial 0 1 1 0 2.50

Salisbury Bancorp presently has a consensus target price of $51.00, suggesting a potential upside of 17.24%. BankFinancial has a consensus target price of $16.88, suggesting a potential downside of 3.68%. Given Salisbury Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Salisbury Bancorp is more favorable than BankFinancial.

Dividends

Salisbury Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 2.6%. BankFinancial pays an annual dividend of $0.36 per share and has a dividend yield of 2.1%. Salisbury Bancorp pays out 39.7% of its earnings in the form of a dividend. BankFinancial pays out 57.1% 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. Salisbury Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Salisbury Bancorp and BankFinancial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Salisbury Bancorp $43.76 million 2.77 $6.25 million $2.82 15.43
BankFinancial $62.59 million 4.97 $9.00 million $0.63 27.81

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

Risk and Volatility

Salisbury Bancorp has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, BankFinancial has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500.

Summary

BankFinancial beats Salisbury Bancorp on 8 of the 15 factors compared between the two stocks.

About Salisbury Bancorp

Salisbury Bancorp, Inc. operates as the bank holding company for Salisbury Bank and Trust Company that provides commercial banking, consumer financing, retail banking, and trust and wealth advisory services. It offers various retail and commercial deposit products. The company also provides loans, such as residential and commercial real estate loans; construction loans; commercial loans; and consumer loans, including home equity loans and lines of credit, and auto and personal installment loans. In addition, it offers a range of fiduciary services, including trust and estate administration, wealth advisory, and investment management services to individuals, families, businesses, and institutions. Further, the company provides additional depositor related services consisting of landlord/tenant lease security accounts and services, merchant services, payroll services, ATM services, bank-by-phone services, Internet banking services, Internet bill pay services, person to person payments, bank to bank transfers, mobile banking services, and online financial management with account aggregation services, as well as cash management services, including remote deposit capture, ACH origination, wire transfers, and positive pay services. It operates through a network of 14 banking offices and 10 ATMs located in Litchfield County, Connecticut; Dutchess, Orange, and Ulster Counties, New York; and Berkshire County, Massachusetts, as well as through its main office located in Lakeville, Connecticut. Salisbury Bancorp, Inc. was founded in 1848 and is headquartered in Lakeville, Connecticut.

About BankFinancial

BankFinancial Corporation operates as the holding company for BankFinancial, National Association that provides commercial, family, and personal banking products and services in Illinois. The company accepts various deposit products, such as savings, NOW, checking, money market, IRA, and other retirement accounts, as well as certificates of deposit. It also offers multi-family and nonresidential real estate, construction and land, and commercial loans, as well as commercial leases; consumer loans; and one-to-four family residential mortgage loans, including home equity loans and lines of credit. In addition, the company provides various financial products and services, such as cash management, fund transfer, bill payment and other online and mobile banking transactions, automated teller machines, safe deposit boxes, trust, wealth management, and general insurance agency. Further, it offers financial planning services; and sells property and casualty, and other insurance products on an agency basis. It operates 19 full-service banking offices located in Cook, DuPage, Lake, and Will Counties. BankFinancial Corporation was founded in 1924 and is headquartered in Burr Ridge, Illinois.

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