In a recent analysis of two small-cap finance companies, Suruga Bank and Northeast Bancorp, investors are considering which stock presents a stronger investment opportunity. The comparison evaluates various metrics, including earnings strength, institutional ownership, risk profiles, analyst recommendations, valuation, dividends, and profitability.
Dividend Analysis
Suruga Bank, headquartered in Numazu, Japan, offers an annual dividend of $2.09 per share, resulting in a dividend yield of 2.6%. In contrast, Northeast Bancorp, based in Portland, Maine, pays a significantly lower annual dividend of $0.04 per share, with a yield of 0.0%. Suruga Bank distributes 22.6% of its earnings in dividends, while Northeast Bancorp allocates just 0.4%.
Both banks maintain healthy payout ratios, suggesting they are well-positioned to sustain their dividend payments in the coming years. This factor may influence income-focused investors looking for reliable returns.
Valuation and Earnings Comparison
When assessing revenue and earnings, Suruga Bank outperforms Northeast Bancorp in terms of top-line growth and earnings per share (EPS). Furthermore, Suruga Bank currently trades at a lower price-to-earnings ratio than its counterpart, indicating it may represent a more affordable investment option at this time.
In terms of risk, Suruga Bank has a beta of -0.08, indicating its share price is 108% less volatile than the S&P 500. Conversely, Northeast Bancorp has a beta of 0.55, suggesting its shares are 45% less volatile than the index. This lower volatility may appeal to conservative investors.
Analysts also provide insights into the potential future performance of these stocks. Northeast Bancorp possesses a consensus target price of $102.00, indicating a potential downside of 3.78%. Despite this, analysts express a stronger preference for Northeast Bancorp due to its favorable consensus rating and higher possible upside compared to Suruga Bank.
Profitability Metrics
A comparative analysis of net margins, return on equity, and return on assets further highlights the financial health of each bank. While Northeast Bancorp excels in some profitability metrics, it falls short in others, with Suruga Bank leading in overall earnings strength.
In summary, while Northeast Bancorp outperforms Suruga Bank in ten of the fourteen factors analyzed, the latter presents certain advantages, particularly in dividend yield and valuation metrics. Investors interested in these finance stocks should carefully consider these aspects before making investment decisions.
Company Overviews
Suruga Bank Ltd. provides a wide range of banking and financial products to individuals and corporate clients in Japan. Established in 1895, the bank offers services such as deposit products, various loans, credit and debit cards, and online banking solutions.
Northeast Bancorp, founded in 1872, serves individual and corporate customers in Maine. Its offerings include various deposit accounts, a diverse loan portfolio, and modern banking services like online banking and cash management.
Both financial institutions have unique strengths, and their performance metrics offer valuable insights for potential investors navigating the small-cap finance sector.
