Fidelity D & D Bancorp (NASDAQ:FDBC) & Northwest Bancshares (NASDAQ:NWBI) Critical Review

Fidelity D & D Bancorp (NASDAQ:FDBC) and Northwest Bancshares (NASDAQ:NWBI) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Volatility & Risk

Fidelity D & D Bancorp has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Northwest Bancshares has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

Dividends

Fidelity D & D Bancorp pays an annual dividend of $1.52 per share and has a dividend yield of 3.1%. Northwest Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 6.2%. Fidelity D & D Bancorp pays out 53.7% of its earnings in the form of a dividend. Northwest Bancshares pays out 77.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fidelity D & D Bancorp has increased its dividend for 9 consecutive years.

Profitability

This table compares Fidelity D & D Bancorp and Northwest Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fidelity D & D Bancorp	14.14%	11.27%	0.84%
Northwest Bancshares	14.28%	8.72%	0.93%

Earnings & Valuation

This table compares Fidelity D & D Bancorp and Northwest Bancshares”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fidelity D & D Bancorp	$70.18 million	4.00	$18.21 million	$2.83	17.29
Northwest Bancshares	$502.30 million	3.29	$134.96 million	$1.03	12.61

Northwest Bancshares has higher revenue and earnings than Fidelity D & D Bancorp. Northwest Bancshares is trading at a lower price-to-earnings ratio than Fidelity D & D Bancorp, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

20.0% of Fidelity D & D Bancorp shares are owned by institutional investors. Comparatively, 66.3% of Northwest Bancshares shares are owned by institutional investors. 21.0% of Fidelity D & D Bancorp shares are owned by company insiders. Comparatively, 1.1% of Northwest Bancshares 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.

Analyst Recommendations

This is a summary of current ratings and price targets for Fidelity D & D Bancorp and Northwest Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fidelity D & D Bancorp	0	0	0	0	N/A
Northwest Bancshares	1	1	0	0	1.50

Northwest Bancshares has a consensus price target of $11.00, suggesting a potential downside of 15.32%. Given Northwest Bancshares’ higher probable upside, analysts clearly believe Northwest Bancshares is more favorable than Fidelity D & D Bancorp.

Summary

Northwest Bancshares beats Fidelity D & D Bancorp on 8 of the 15 factors compared between the two stocks.

About Fidelity D & D Bancorp

Fidelity D & D Bancorp, Inc. operates as the bank holding company for The Fidelity Deposit and Discount Bank that provides a range of banking, trust, and financial services to individuals, small businesses, and corporate customers. The company accepts savings, club, interest-bearing and non-interest-bearing checking, money market, and short- and long-term time deposits, as well as certificates of deposit. It also offers commercial and industrial, commercial real estate, consumer, and residential mortgage loans. In addition, the company provides alternative financial and insurance products with asset management services. The company was founded in 1902 and is headquartered in Dunmore, Pennsylvania.

About Northwest Bancshares

Northwest Bancshares, Inc. operates as the bank holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans, shorter term consumer loans, and loans collateralized by multi-family residential and commercial real estate; home equity loans and lines of credit; commercial business and real estate loans; commercial loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by investment accounts, as well as investment management and trust services. The company operates community banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.