Financial Contrast: Northwest Bancshares (NWBI) versus Sandy Spring Bancorp (SASR)

Northwest Bancshares (NASDAQ:NWBI) and Sandy Spring Bancorp (NASDAQ:SASR) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Institutional and Insider Ownership

70.3% of Northwest Bancshares shares are owned by institutional investors. Comparatively, 68.7% of Sandy Spring Bancorp shares are owned by institutional investors. 2.2% of Northwest Bancshares shares are owned by insiders. Comparatively, 3.3% of Sandy Spring Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Northwest Bancshares has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Sandy Spring Bancorp has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Earnings and Valuation

This table compares Northwest Bancshares and Sandy Spring Bancorp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Northwest Bancshares $469.34 million 3.56 $94.46 million $0.84 19.30
Sandy Spring Bancorp $246.04 million 5.29 $53.20 million $2.54 14.43

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

Dividends

Northwest Bancshares pays an annual dividend of $0.68 per share and has a dividend yield of 4.2%. Sandy Spring Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 3.1%. Northwest Bancshares pays out 81.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sandy Spring Bancorp pays out 44.1% of its earnings in the form of a dividend. Northwest Bancshares has raised its dividend for 2 consecutive years and Sandy Spring Bancorp has raised its dividend for 7 consecutive years.

Profitability

This table compares Northwest Bancshares and Sandy Spring Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northwest Bancshares 21.20% 8.06% 1.03%
Sandy Spring Bancorp 22.29% 10.53% 1.24%

Analyst Ratings

This is a summary of current ratings and target prices for Northwest Bancshares and Sandy Spring Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northwest Bancshares 0 2 0 0 2.00
Sandy Spring Bancorp 0 1 4 0 2.80

Northwest Bancshares currently has a consensus price target of $17.00, indicating a potential upside of 4.87%. Sandy Spring Bancorp has a consensus price target of $46.50, indicating a potential upside of 26.84%. Given Sandy Spring Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Sandy Spring Bancorp is more favorable than Northwest Bancshares.

Summary

Sandy Spring Bancorp beats Northwest Bancshares on 11 of the 17 factors compared between the two stocks.

About Northwest Bancshares

Northwest Bancshares, Inc. operates as a bank holding company for Northwest Savings Bank that offers various personal and business banking solutions in the United States. The company offers personal and business deposits, such as checking, savings, money market deposit, term certificate, and individual retirement accounts. Its loan portfolio comprise one-to-four family residential real estate, residential mortgage, short term consumer, multi-family residential and commercial real estate, commercial business, and home equity loans; lines of credit; and consumer loans, including automobile, sales finance, unsecured personal, and credit card loans, as well as loans secured by deposit accounts. In addition, the company offers employee benefit, property, and casualty insurance services; and trust, investment management, and brokerage services. As of December 31, 2017, it operated 172 community-banking locations in central and western Pennsylvania, western New York, and eastern Ohio. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Warren, Pennsylvania.

About Sandy Spring Bancorp

Sandy Spring Bancorp, Inc. operates as the bank holding company for Sandy Spring Bank that provides commercial banking services to individuals and businesses in central Maryland, Northern Virginia, and Washington D.C. markets. It operates through three segments: Community Banking, Insurance, and Investment Management. The Community Banking segment provides financial products and services, including various loan and deposit products to individuals and businesses. Its deposit products include demand, money market savings, regular savings, and time deposits. This segment's loan portfolio comprises residential real estate loans; commercial real estate loans, commercial construction loans, and other commercial loans; and consumer loans comprising home equity loans and lines, installment loans, and personal lines of credit. The Insurance segment provides general insurance agency services and annuities. The Investment Management segment provides comprehensive investment management and financial planning to individuals, families, small businesses, and associations, including cash flow analysis, investment review, tax planning, retirement planning, insurance analysis, and estate planning. The company also provides mortgage banking, equipment leasing, personal trust, and wealth management services. As of December 31, 2017, it operated 42 community offices and 6 financial centers. The company was founded in 1868 and is headquartered in Olney, Maryland.

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