Comparing Eagle Bancorp (NASDAQ:EGBN) & Northeast Community Bancorp (NASDAQ:NECB)

Northeast Community Bancorp (NASDAQ:NECB) and Eagle Bancorp (NASDAQ:EGBN) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Institutional and Insider Ownership

53.3% of Northeast Community Bancorp shares are held by institutional investors. Comparatively, 78.0% of Eagle Bancorp shares are held by institutional investors. 6.3% of Northeast Community Bancorp shares are held by insiders. Comparatively, 3.4% of Eagle Bancorp shares are held by 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.

Dividends

Northeast Community Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 3.5%. Eagle Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. Northeast Community Bancorp pays out 24.5% of its earnings in the form of a dividend. Eagle Bancorp pays out -1.0% 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. Northeast Community Bancorp has raised its dividend for 2 consecutive years. Northeast Community Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for Northeast Community Bancorp and Eagle Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northeast Community Bancorp	0	2	0	0	2.00
Eagle Bancorp	1	4	1	0	2.00

Eagle Bancorp has a consensus target price of $21.25, indicating a potential downside of 2.88%. Given Eagle Bancorp’s higher possible upside, analysts clearly believe Eagle Bancorp is more favorable than Northeast Community Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Northeast Community Bancorp	27.97%	13.43%	2.23%
Eagle Bancorp	-18.65%	-10.07%	-1.10%

Earnings and Valuation

This table compares Northeast Community Bancorp and Eagle Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Community Bancorp	$162.80 million	1.98	$47.07 million	$3.27	7.04
Eagle Bancorp	$707.50 million	0.94	-$47.03 million	($3.96)	-5.53

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

Volatility and Risk

Northeast Community Bancorp has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500. Comparatively, Eagle Bancorp has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Summary

Northeast Community Bancorp beats Eagle Bancorp on 10 of the 16 factors compared between the two stocks.

About Northeast Community Bancorp

Northeast Community Bancorp, Inc. operates as the holding company for NorthEast Community Bank that provides financial services for individuals and businesses. It accepts various deposit instruments, including checking accounts, money market accounts, regular savings accounts, and non-interest bearing demand accounts, as well as certificates of deposits. The company also offers construction, commercial and industrial, multifamily and mixed-use real estate, non-residential real estate loans, and consumer loans. In addition, it invests in various types of liquid assets, including U.S. Treasury obligations, municipal securities, deposits at the Federal Home Loan Bank of New York, and certificates of deposit of federally insured institutions, as well as securities of various federal agencies, and of state and municipal governments. Further, the company offers financial planning and investment advisory services; and life insurance products and fixed-rate annuities. It operates full-service branches located in Bronx, New York, Orange, Rockland, and Sullivan Counties in New York and Essex, Middlesex, and Norfolk Counties in Massachusetts; and loan production offices located in White Plains, New York, and New City counties in New York and Danvers, Massachusetts. Northeast Community Bancorp, Inc. was founded in 1934 and is headquartered in White Plains, New York.

About Eagle Bancorp

Eagle Bancorp, Inc. operates as the bank holding company for EagleBank that provides commercial and consumer banking services primarily in the United States. The company also offers various commercial and consumer lending products comprising commercial loans for working capital, equipment purchases, real estate lines of credit, and government contract financing; asset based lending and accounts receivable financing; construction and commercial real estate loans; business equipment financing; consumer home equity lines of credit, personal lines of credit, and term loans; consumer installment loans, such as auto and personal loans; personal credit cards; and residential mortgage loans. In addition, it provides online and mobile banking services; checking and saving accounts; and other deposit services, including cash management services, business sweep accounts, lock boxes, remote deposit captures, account reconciliation services, merchant card services, safety deposit boxes, and automated clearing house origination, as well as after-hours depositories and ATM services. Further, the company offers insurance products and services through a referral program; and treasury management services. The company serves sole proprietors, small and medium-sized businesses, partnerships, corporations, and non-profit organizations and associations, as well as investors. Eagle Bancorp, Inc. was incorporated in 1997 and is headquartered in Bethesda, Maryland.