Financial Survey: Norwood Financial (NASDAQ:NWFL) versus Malaga Financial (OTCMKTS:MLGF)

Norwood Financial (NASDAQ:NWFL) and Malaga Financial (OTCMKTS:MLGF) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, valuation, risk, analyst recommendations, institutional ownership, earnings and dividends.

Profitability

This table compares Norwood Financial and Malaga Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norwood Financial	11.52%	7.40%	0.59%
Malaga Financial	N/A	N/A	N/A

Valuation & Earnings

This table compares Norwood Financial and Malaga Financial”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norwood Financial	$68.61 million	3.45	$16.76 million	$1.91	15.30
Malaga Financial	N/A	N/A	$22.98 million	$2.59	8.83

Malaga Financial has lower revenue, but higher earnings than Norwood Financial. Malaga Financial is trading at a lower price-to-earnings ratio than Norwood Financial, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Norwood Financial has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Malaga Financial has a beta of 0.49, indicating that its share price is 51% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Norwood Financial and Malaga Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norwood Financial	0	0	0	0	N/A
Malaga Financial	0	0	0	0	N/A

Insider & Institutional Ownership

28.1% of Norwood Financial shares are owned by institutional investors. Comparatively, 1.2% of Malaga Financial shares are owned by institutional investors. 9.1% of Norwood Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Norwood Financial pays an annual dividend of $1.20 per share and has a dividend yield of 4.1%. Malaga Financial pays an annual dividend of $1.00 per share and has a dividend yield of 4.4%. Norwood Financial pays out 62.8% of its earnings in the form of a dividend. Malaga Financial pays out 38.6% 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. Norwood Financial has increased its dividend for 6 consecutive years. Malaga Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Norwood Financial beats Malaga Financial on 9 of the 13 factors compared between the two stocks.

About Norwood Financial

Norwood Financial Corp. operates as the bank holding company for Wayne Bank that provides various banking products and services. The company accepts a range of deposit products, including interest-bearing and non-interest-bearing transaction accounts, and statement savings and money market accounts, as well as certificate of deposits. It also provides commercial loans comprising lines of credit, revolving credit, term loans, mortgages, secured lending products, and letter of credit facilities; municipal finance lending; construction loans for commercial construction projects and single-family residences; land loans; construction financing; consumer loans; mortgage lending to finance principal residences and second home dwellings; and indirect dealer financing of new and used automobiles, boats, and recreational vehicles. In addition, the company offers investment securities services; personal and business credit services; trust and investment products; and cash management, direct deposit, remote deposit capture, mobile deposit capture, automated clearing house activity, real estate settlement, and Internet and mobile banking services. Further, it engages in the annuity and mutual fund sale, and discount brokerage activities, as well as insurance agency business. The company serves consumers, businesses, nonprofit organizations, and municipalities. It operates branches in Northeastern Pennsylvania; and in Delaware, Sullivan, Ontario, Otsego, and Yates Counties, New York, as well as automated teller machines. Norwood Financial Corp. was founded in 1870 and is headquartered in Honesdale, Pennsylvania.

About Malaga Financial

Malaga Financial Corporation operates as the holding company for Malaga Bank that provides various community banking products and services to personal and business customers. It offers checking, savings, NOW, and money market accounts, certificates of deposits, business banking, consumer, and demand deposits. The company also provides commercial real estate, single and multi-family residential mortgage, consumer, 14-unit investment property, construction, personal, and business loans; home equity lines of credit; and certificates of deposit. In addition, it offers coupon redemption, direct deposit, overdraft lines of credit, telephone transfers, U.S. savings bond redemption, and wire transfer services; and ATM and VISA debit cards, bank by mail, medallion signature guarantee, night depository, notary, safe deposit boxes, and trust deed note collection services. Further, the company provides online banking services, including bill payer, e-statements, and mobile banking services. The company was incorporated in 2002 and is headquartered in Palos Verdes Estates, California.