Critical Review: Parke Bancorp (NASDAQ:PKBK) versus First Northwest Bancorp (NASDAQ:FNWB)

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

Risk and Volatility

First Northwest Bancorp has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Parke Bancorp has a beta of 0.52, suggesting that its share price is 48% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for First Northwest Bancorp and Parke Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Northwest Bancorp	0	2	1	1	2.75
Parke Bancorp	0	0	1	0	3.00

First Northwest Bancorp presently has a consensus price target of $14.00, indicating a potential upside of 38.61%. Given First Northwest Bancorp’s higher possible upside, research analysts clearly believe First Northwest Bancorp is more favorable than Parke Bancorp.

Institutional & Insider Ownership

66.1% of First Northwest Bancorp shares are owned by institutional investors. Comparatively, 49.7% of Parke Bancorp shares are owned by institutional investors. 4.1% of First Northwest Bancorp shares are owned by company insiders. Comparatively, 13.0% of Parke Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares First Northwest Bancorp and Parke Bancorp”s top-line 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	0.81	-$4.19 million	($0.01)	-1,010.00
Parke Bancorp	$93.60 million	4.08	$37.78 million	$3.97	8.18

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
First Northwest Bancorp	-0.04%	0.62%	0.05%
Parke Bancorp	30.55%	14.13%	2.10%

Summary

Parke Bancorp beats First Northwest Bancorp on 8 of the 14 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 Parke Bancorp

Parke Bancorp, Inc. operates as the bank holding company for Parke Bank that provides personal and business financial services to individuals and small to mid-sized businesses. The company offers various deposit products, including checking, savings, time, money market, and individual retirement accounts, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, construction, commercial and residential real estate mortgage, and consumer loans. In addition, the company provides debit cards, internet banking, and online bill payment services. Parke Bancorp, Inc. was founded in 1999 and is headquartered in Washington Township, New Jersey.