Analyzing Northeast Indiana Bancorp (OTCMKTS:NIDB) & Timberland Bancorp (NASDAQ:TSBK)

Timberland Bancorp (NASDAQ:TSBK) and Northeast Indiana Bancorp (OTCMKTS:NIDB) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Risk & Volatility

Timberland Bancorp has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500. Comparatively, Northeast Indiana Bancorp has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500.

Institutional and Insider Ownership

65.5% of Timberland Bancorp shares are held by institutional investors. 3.7% of Timberland Bancorp shares are held by company insiders. Comparatively, 19.8% of Northeast Indiana Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Timberland Bancorp and Northeast Indiana Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Timberland Bancorp	$78.42 million	3.32	$24.28 million	$3.68	8.97
Northeast Indiana Bancorp	$31.80 million	1.52	$4.31 million	$2.30	8.86

Timberland Bancorp has higher revenue and earnings than Northeast Indiana Bancorp. Northeast Indiana Bancorp is trading at a lower price-to-earnings ratio than Timberland Bancorp, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Timberland Bancorp and Northeast Indiana Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timberland Bancorp	0	0	1	0	3.00
Northeast Indiana Bancorp	0	0	0	0	0.00

Profitability

This table compares Timberland Bancorp and Northeast Indiana Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Timberland Bancorp	24.19%	10.79%	1.40%
Northeast Indiana Bancorp	16.57%	N/A	N/A

Dividends

Timberland Bancorp pays an annual dividend of $1.12 per share and has a dividend yield of 3.4%. Northeast Indiana Bancorp pays an annual dividend of $0.76 per share and has a dividend yield of 3.7%. Timberland Bancorp pays out 30.4% of its earnings in the form of a dividend. Northeast Indiana Bancorp pays out 33.0% 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. Timberland Bancorp has increased its dividend for 13 consecutive years.

Summary

Timberland Bancorp beats Northeast Indiana Bancorp on 14 of the 16 factors compared between the two stocks.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.

About Northeast Indiana Bancorp

Northeast Indiana Bancorp, Inc. operates as the bank holding company for First Federal Savings Bank that provides various banking and financial advisory services. The company offers checking accounts, savings accounts, retirement accounts, health savings accounts, and direct deposits, as well as certificates of deposit. It also provides mortgage, refinance, new construction, and home equity loans; auto, recreational vehicle, and unsecured loans; and revolving lines of credit, term loans, real estate loans, letter of credit, and small business administration loans, as well as debit and credit cards. In addition, the company offers merchant, online banking, and cash management services. It operates through full-service locations in Huntington, Warsaw, and Fort Wayne, Indiana. The company was founded in 1912 and is headquartered in Huntington, Indiana.