Malaga Financial (OTCMKTS:MLGF) and First Northwest Bancorp (NASDAQ:FNWB) Critical Analysis

First Northwest Bancorp (NASDAQ:FNWB) and Malaga Financial (OTCMKTS:MLGF) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Northwest Bancorp	$118.64 million	0.69	-$4.19 million	$0.72	12.01
Malaga Financial	N/A	N/A	$21.55 million	$2.18	9.78

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

Volatility & Risk

First Northwest Bancorp has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500. Comparatively, Malaga Financial has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500.

Insider and Institutional Ownership

66.1% of First Northwest Bancorp shares are held by institutional investors. Comparatively, 1.2% of Malaga Financial shares are held by institutional investors. 5.5% of First Northwest Bancorp shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Northwest Bancorp	5.35%	4.18%	0.30%
Malaga Financial	N/A	N/A	N/A

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Northwest Bancorp	1	2	1	0	2.00
Malaga Financial	0	0	0	0	0.00

First Northwest Bancorp currently has a consensus target price of $13.50, indicating a potential upside of 56.07%. Given First Northwest Bancorp’s stronger consensus rating and higher possible upside, analysts clearly believe First Northwest Bancorp is more favorable than Malaga Financial.

Summary

First Northwest Bancorp beats Malaga Financial on 11 of the 13 factors compared between the two stocks.

About First Northwest Bancorp

First Northwest Bancorp operates as a bank holding company for First Fed Bank that provides commercial and consumer banking services to individuals, businesses, and nonprofit organizations in western Washington, the United States. The company accepts various deposit instruments, including checking, money market deposit, savings, and transaction accounts, as well as certificates of deposit. It also originates one- to four-family mortgage loans, commercial and multi-family real estate loans, construction and land loans, and commercial business loans, as well as consumer loans primarily consisting of automobile loans, and home-equity loans and lines of credit. First Northwest Bancorp operates branch offices in Clallam, Jefferson, King, Kitsap, and Whatcom Counties, Washington. First Northwest Bancorp was founded in 1923 and is based in Port Angeles, Washington.

About Malaga Financial

Malaga Financial Corporation operates as the holding company for Malaga Bank that provides various community banking products and services to personal and business customers. It offers checking, savings, NOW, and money market accounts, certificates of deposits, business banking, consumer, and demand deposits. The company also provides commercial real estate, single and multi-family residential mortgage, consumer, 14-unit investment property, construction, personal, and business loans; home equity lines of credit; and certificates of deposit. In addition, it offers coupon redemption, direct deposit, overdraft lines of credit, telephone transfers, U.S. savings bond redemption, and wire transfer services; and ATM and VISA debit cards, bank by mail, medallion signature guarantee, night depository, notary, safe deposit boxes, and trust deed note collection services. Further, the company provides online banking services, including bill payer, e-statements, and mobile banking services. The company was incorporated in 2002 and is headquartered in Palos Verdes Estates, California.