Bankwell Financial Group (NASDAQ:BWFG) versus Bank of the James Financial Group (NASDAQ:BOTJ) Financial Survey

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

Institutional & Insider Ownership

35.8% of Bankwell Financial Group shares are held by institutional investors. Comparatively, 18.5% of Bank of the James Financial Group shares are held by institutional investors. 19.2% of Bankwell Financial Group shares are held by insiders. Comparatively, 15.3% of Bank of the James Financial Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Bankwell Financial Group and Bank of the James Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bankwell Financial Group	7.77%	5.74%	0.48%
Bank of the James Financial Group	14.46%	13.36%	0.85%

Valuation and Earnings

This table compares Bankwell Financial Group and Bank of the James Financial Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bankwell Financial Group	$89.21 million	2.46	$36.66 million	$1.95	14.34
Bank of the James Financial Group	$42.64 million	1.34	$8.70 million	$1.84	6.79

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

Analyst Ratings

This is a summary of recent ratings and target prices for Bankwell Financial Group and Bank of the James Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bankwell Financial Group	0	0	1	0	3.00
Bank of the James Financial Group	0	0	0	0	0.00

Bankwell Financial Group currently has a consensus target price of $40.00, indicating a potential upside of 43.01%. Given Bankwell Financial Group’s stronger consensus rating and higher possible upside, research analysts plainly believe Bankwell Financial Group is more favorable than Bank of the James Financial Group.

Risk & Volatility

Bankwell Financial Group has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, Bank of the James Financial Group has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Dividends

Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. Bank of the James Financial Group pays an annual dividend of $0.40 per share and has a dividend yield of 3.2%. Bankwell Financial Group pays out 41.0% of its earnings in the form of a dividend. Bank of the James Financial Group pays out 21.7% 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. Bank of the James Financial Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Bankwell Financial Group beats Bank of the James Financial Group on 11 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 Bank of the James Financial Group

Bank of the James Financial Group, Inc. operates as the bank holding company for Bank of the James that provides general retail and commercial banking services to individuals, businesses, associations and organizations, and governmental authorities in Virginia, the United States. It offers checking, savings, individual retirement, and health care saving accounts, as well as other time deposits, including money market accounts and certificates of deposit. The company also provides loans to small- and medium-sized businesses for the purchases of equipment, facilities upgrades, inventory acquisition, and various working capital purposes; commercial and residential construction and development loans; commercial real estate mortgage loans; residential mortgage loans; and secured and unsecured consumer loans, such as lines of credit and overdraft lines of credit, as well as personal, automobile, installment, demand, and home equity loans for personal, family, or household purposes. In addition, it offers other banking services, including safe deposit boxes, traveler's checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, treasury management, and credit card merchant services. Further, the company provides mortgage banking; investment advisory services; securities brokerage and investment services; and telephone and internet banking services comprising online bill pay, as well as acts as an agent for insurance and annuity products. The company was founded in 1999 and is headquartered in Lynchburg, Virginia.