Financial Analysis: Flagstar Financial (NYSE:FLG) versus Third Coast Bancshares (NASDAQ:TCBX)

Flagstar Financial (NYSE:FLG) and Third Coast Bancshares (NASDAQ:TCBX) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Valuation and Earnings

This table compares Flagstar Financial and Third Coast Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flagstar Financial	$2.58 billion	1.97	-$1.09 billion	($3.69)	-3.33
Third Coast Bancshares	$170.48 million	2.73	$47.67 million	$2.77	12.19

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

Profitability

This table compares Flagstar Financial and Third Coast Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flagstar Financial	-17.16%	-10.72%	-0.76%
Third Coast Bancshares	14.06%	10.93%	1.04%

Insider and Institutional Ownership

67.9% of Flagstar Financial shares are held by institutional investors. Comparatively, 36.9% of Third Coast Bancshares shares are held by institutional investors. 6.4% of Flagstar Financial shares are held by company insiders. Comparatively, 10.2% of Third Coast Bancshares shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Flagstar Financial has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Third Coast Bancshares has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500.

Dividends

Flagstar Financial pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Third Coast Bancshares pays an annual dividend of $16.87 per share and has a dividend yield of 50.0%. Flagstar Financial pays out -1.1% of its earnings in the form of a dividend. Third Coast Bancshares pays out 609.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of current ratings for Flagstar Financial and Third Coast Bancshares, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flagstar Financial	0	3	2	0	2.40
Third Coast Bancshares	0	2	2	0	2.50

Flagstar Financial presently has a consensus price target of $12.90, indicating a potential upside of 5.05%. Third Coast Bancshares has a consensus price target of $37.25, indicating a potential upside of 10.31%. Given Third Coast Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe Third Coast Bancshares is more favorable than Flagstar Financial.

Summary

Third Coast Bancshares beats Flagstar Financial on 11 of the 15 factors compared between the two stocks.

About Flagstar Financial

Flagstar Financial, Inc. operates as the bank holding company for Flagstar Bank, N.A. that provides banking products and services in the United States. The company’s deposit products include interest-bearing checking and money market, savings, non-interest-bearing, and retirement accounts, as well as certificates of deposit. Its loan products comprise multi-family loans; commercial real estate loans; acquisition, development, and construction loans; commercial and industrial loans; one-to-four family loans; specialty finance loans and leases; warehouse loans; and other loans, such as home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans, and other consumer loans, including overdraft loans. The company offers cash management products; non-deposit investment and insurance products; and online banking, mobile banking, and bank-by-phone services. It primarily serves individuals, small and mid-size businesses, and professional associations. The company was formerly known as New York Community Bancorp, Inc. and changed its name to Flagstar Financial, Inc. in October 2024. Flagstar Financial, Inc. was founded in 1859 and is headquartered in Hicksville, New York.

About Third Coast Bancshares

Third Coast Bancshares, Inc. operates as a bank holding company for Third Coast Bank, SSB that provides various commercial banking solutions to small and medium-sized businesses, and professionals. The company's deposit products include checking, savings, individual retirement, and money market accounts, as well as certificates of deposit. It also offers commercial and industrial loans, equipment loans, working capital lines of credit, guaranteed loans, auto finance, letters of credit, commercial and residential real estate, and construction, development, and other loans. In addition, the company provides retail and commercial online banking platforms, mobile banking apps, mortgage, treasury management solutions, merchant card services, and customer digital solutions, as well as debit and credit cards. Third Coast Bancshares, Inc. was founded in 2008 and is headquartered in Humble, Texas.