Financial Analysis: Richmond Mutual Bancorporation (NASDAQ:RMBI) versus Norwood Financial (NASDAQ:NWFL)

Norwood Financial (NASDAQ:NWFL) and Richmond Mutual Bancorporation (NASDAQ:RMBI) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Analyst Ratings

This is a breakdown of current ratings for Norwood Financial and Richmond Mutual Bancorporation, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norwood Financial	0	0	0	0	N/A
Richmond Mutual Bancorporation	0	0	0	0	N/A

Institutional & Insider Ownership

28.1% of Norwood Financial shares are held by institutional investors. Comparatively, 26.5% of Richmond Mutual Bancorporation shares are held by institutional investors. 9.1% of Norwood Financial shares are held by insiders. Comparatively, 8.2% of Richmond Mutual Bancorporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Norwood Financial has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Richmond Mutual Bancorporation has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Earnings & Valuation

This table compares Norwood Financial and Richmond Mutual Bancorporation”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norwood Financial	$68.61 million	3.30	$16.76 million	$1.91	14.65
Richmond Mutual Bancorporation	$42.23 million	3.38	$9.49 million	$0.87	14.82

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

Dividends

Norwood Financial pays an annual dividend of $1.20 per share and has a dividend yield of 4.3%. Richmond Mutual Bancorporation pays an annual dividend of $0.56 per share and has a dividend yield of 4.3%. Norwood Financial pays out 62.8% of its earnings in the form of a dividend. Richmond Mutual Bancorporation pays out 64.4% 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 raised its dividend for 6 consecutive years.

Profitability

This table compares Norwood Financial and Richmond Mutual Bancorporation’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%
Richmond Mutual Bancorporation	10.37%	6.44%	0.57%

Summary

Norwood Financial beats Richmond Mutual Bancorporation on 10 of the 14 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 Richmond Mutual Bancorporation

Richmond Mutual Bancorporation, Inc. operates as the bank holding company for First Bank Richmond that provides various banking services. It accepts various deposits, including savings deposit accounts, money market accounts, NOW and demand accounts, and certificates of deposit. The company also offers a range of lending products, such as multi-family and commercial real estate loans, commercial and industrial loans, construction and development loans, residential real estate loans, and consumer loans. In addition, it engages in the lease financing business; and provision of fee-based financial services comprising trust and estate administration, investment management, retirement plan administration, and private banking services. The company was founded in 1887 and is headquartered in Richmond, Indiana.