Analyzing Northwest Bancshares (NASDAQ:NWBI) and Pathward Financial (NASDAQ:CASH)

Northwest Bancshares (NASDAQ:NWBI) and Pathward Financial (NASDAQ:CASH) 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, risk, institutional ownership, profitability, analyst recommendations, valuation and dividends.

Insider & Institutional Ownership

66.3% of Northwest Bancshares shares are held by institutional investors. Comparatively, 92.7% of Pathward Financial shares are held by institutional investors. 1.1% of Northwest Bancshares shares are held by company insiders. Comparatively, 0.7% of Pathward Financial shares are held by company 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Northwest Bancshares and Pathward Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northwest Bancshares	1	1	0	0	1.50
Pathward Financial	0	1	1	0	2.50

Northwest Bancshares currently has a consensus price target of $11.00, indicating a potential downside of 16.41%. Pathward Financial has a consensus price target of $71.00, indicating a potential upside of 10.68%. Given Pathward Financial’s stronger consensus rating and higher probable upside, analysts plainly believe Pathward Financial is more favorable than Northwest Bancshares.

Earnings and Valuation

This table compares Northwest Bancshares and Pathward Financial’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northwest Bancshares	$701.74 million	2.39	$134.96 million	$1.03	12.78
Pathward Financial	$715.33 million	2.27	$163.62 million	$6.66	9.63

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

Profitability

This table compares Northwest Bancshares and Pathward Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northwest Bancshares	14.28%	8.72%	0.93%
Pathward Financial	22.10%	23.59%	2.24%

Risk and Volatility

Northwest Bancshares has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Pathward Financial has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Dividends

Northwest Bancshares pays an annual dividend of $0.80 per share and has a dividend yield of 6.1%. Pathward Financial pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. 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. Pathward Financial pays out 3.0% of its earnings in the form of a dividend.

Summary

Pathward Financial beats Northwest Bancshares on 12 of the 16 factors compared between the two stocks.

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.

About Pathward Financial

Pathward Financial, Inc. operates as the bank holding company for Pathward, National Association that provides various banking products and services in the United States. The company operates through three segments: Consumer, Commercial, and Corporate Services/Other. It offers demand deposit accounts, savings accounts, and money market savings accounts. The company also provides commercial finance product comprising term lending, asset-based lending, factoring, lease financing, insurance premium finance, government guaranteed lending, and other commercial finance products; consumer credit products; other consumer financing services; tax services, which includes short-term refund advance loans and short-term electronic return originator advance loans; and warehouse financing services. In addition, it issues prepaid cards; and offers payment solutions, such as acceptance, processing, and settlement of credit card and debit card payments. The company was formerly known as Meta Financial Group, Inc. and changed its name to Pathward Financial, Inc. in July 2022. Pathward Financial, Inc. was founded in 1954 and is based in Sioux Falls, South Dakota.