Pathfinder Bancorp (NASDAQ:PBHC) & Bankwell Financial Group (NASDAQ:BWFG) Financial Survey

Bankwell Financial Group (NASDAQ:BWFG) and Pathfinder Bancorp (NASDAQ:PBHC) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Valuation & Earnings

This table compares Bankwell Financial Group and Pathfinder Bancorp’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bankwell Financial Group	$193.30 million	1.04	$36.66 million	$3.84	6.61
Pathfinder Bancorp	$72.85 million	0.85	$9.29 million	$1.42	9.29

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

Analyst Recommendations

This is a breakdown of current ratings for Bankwell Financial Group and Pathfinder Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bankwell Financial Group	0	0	1	0	3.00
Pathfinder Bancorp	0	0	0	0	N/A

Bankwell Financial Group presently has a consensus target price of $34.00, indicating a potential upside of 34.02%. Given Bankwell Financial Group’s higher probable upside, equities analysts clearly believe Bankwell Financial Group is more favorable than Pathfinder Bancorp.

Dividends

Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 3.2%. Pathfinder Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 3.0%. Bankwell Financial Group pays out 20.8% of its earnings in the form of a dividend. Pathfinder Bancorp pays out 28.2% 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. Pathfinder Bancorp has raised its dividend for 4 consecutive years. Bankwell Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Bankwell Financial Group has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500. Comparatively, Pathfinder Bancorp has a beta of 0.21, suggesting that its share price is 79% less volatile than the S&P 500.

Insider and Institutional Ownership

35.8% of Bankwell Financial Group shares are owned by institutional investors. Comparatively, 26.7% of Pathfinder Bancorp shares are owned by institutional investors. 19.2% of Bankwell Financial Group shares are owned by company insiders. Comparatively, 22.4% of Pathfinder Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bankwell Financial Group	15.28%	11.55%	0.93%
Pathfinder Bancorp	11.50%	7.47%	0.62%

Summary

Bankwell Financial Group beats Pathfinder Bancorp on 13 of the 16 factors compared between the two stocks.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.

About Pathfinder Bancorp

Pathfinder Bancorp, Inc. operates as a bank holding company for Pathfinder Bank that provides various banking and financial products and services in New York. The company's deposit products include checking, savings, and money market deposit accounts; certificates of deposit; and demand and time deposits. Its loan portfolio comprises commercial real estate, commercial, residential real estate, construction, and tax-exempt loans; home equity loans and junior liens; and consumer loans comprising automobile, recreational vehicles, and unsecured personal loans, as well as unsecured lines of credit and loans secured by deposit accounts. The company is also involved in the property, casualty, and life insurance brokerage business. It primarily serves individuals, families, small to mid-size businesses, and municipalities. The company was founded in 1859 and is headquartered in Oswego, New York.