Reviewing Orange County Bancorp (NASDAQ:OBT) and First Financial Northwest (NASDAQ:FFNW)

Orange County Bancorp (NASDAQ:OBT) and First Financial Northwest (NASDAQ:FFNW) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.

Risk & Volatility

Orange County Bancorp has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500. Comparatively, First Financial Northwest has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Orange County Bancorp and First Financial Northwest, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orange County Bancorp	0	0	1	0	3.00
First Financial Northwest	0	2	0	0	2.00

Orange County Bancorp currently has a consensus price target of $35.50, indicating a potential upside of 39.93%. First Financial Northwest has a consensus price target of $22.75, indicating a potential upside of 7.41%. Given Orange County Bancorp’s stronger consensus rating and higher probable upside, research analysts clearly believe Orange County Bancorp is more favorable than First Financial Northwest.

Earnings & Valuation

This table compares Orange County Bancorp and First Financial Northwest”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orange County Bancorp	$107.63 million	2.68	$27.88 million	$2.47	10.27
First Financial Northwest	$37.56 million	5.20	$1.07 million	$0.11	192.55

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

Profitability

This table compares Orange County Bancorp and First Financial Northwest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Orange County Bancorp	19.47%	15.51%	1.12%
First Financial Northwest	1.34%	0.67%	0.07%

Dividends

Orange County Bancorp pays an annual dividend of $0.52 per share and has a dividend yield of 2.0%. First Financial Northwest pays an annual dividend of $0.26 per share and has a dividend yield of 1.2%. Orange County Bancorp pays out 21.1% of its earnings in the form of a dividend. First Financial Northwest pays out 236.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orange County Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

42.5% of Orange County Bancorp shares are held by institutional investors. Comparatively, 55.0% of First Financial Northwest shares are held by institutional investors. 10.5% of Orange County Bancorp shares are held by insiders. Comparatively, 7.2% of First Financial Northwest shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Orange County Bancorp beats First Financial Northwest on 12 of the 16 factors compared between the two stocks.

About Orange County Bancorp

Orange County Bancorp, Inc., through its subsidiaries, provides commercial and consumer banking products and services, and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments, and individuals. It accepts various deposits, including interest-bearing and noninterest-bearing demand accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company also offers commercial real estate loans, commercial and industrial loans, commercial real estate construction loans, residential real estate loans, home equity loans, and consumer loans. In addition, it provides traditional trust and administration, asset management, financial planning, and wealth management services. The company operates full-service branches and loan production office in Orange, Westchester, Rockland, and Bronx counties in New York. Orange County Bancorp, Inc. was founded in 1892 and is headquartered in Middletown, New York.

About First Financial Northwest

First Financial Northwest, Inc. operates as the bank holding company for First Financial Northwest Bank that provides commercial banking services in Washington. The company offers a range of deposit products, including noninterest-bearing accounts, interest-bearing demand accounts, money market accounts, savings accounts, and certificates of deposit. Its loan products comprise one-to-four family residential loans; multifamily and commercial real estate loans; construction/land loans; business loans; and consumer loans, such as home equity loans, lines of credit, second mortgage term loans, auto loans, and savings account loans. The company also provides wealth management services; and online banking services, as well as debit cards and ATMs. The company was founded in 1923 and is headquartered in Renton, Washington.