Reviewing Northeast Community Bancorp (NASDAQ:NECB) & Bank Of Montreal (NYSE:BMO)

Bank Of Montreal (NYSE:BMO) and Northeast Community Bancorp (NASDAQ:NECB) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Bank Of Montreal and Northeast Community Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank Of Montreal	1	6	5	0	2.33
Northeast Community Bancorp	0	2	1	1	2.75

Bank Of Montreal currently has a consensus target price of $163.00, indicating a potential downside of 8.10%. Northeast Community Bancorp has a consensus target price of $29.50, indicating a potential upside of 8.86%. Given Northeast Community Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Northeast Community Bancorp is more favorable than Bank Of Montreal.

Dividends

Bank Of Montreal pays an annual dividend of $4.81 per share and has a dividend yield of 2.7%. Northeast Community Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.7%. Bank Of Montreal pays out 54.3% of its earnings in the form of a dividend. Northeast Community Bancorp pays out 32.1% 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. Bank Of Montreal has increased its dividend for 4 consecutive years and Northeast Community Bancorp has increased its dividend for 2 consecutive years. Northeast Community Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

45.8% of Bank Of Montreal shares are owned by institutional investors. Comparatively, 53.2% of Northeast Community Bancorp shares are owned by institutional investors. 1.0% of Bank Of Montreal shares are owned by insiders. Comparatively, 7.1% of Northeast Community Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Bank Of Montreal	11.72%	13.60%	0.71%
Northeast Community Bancorp	27.67%	12.00%	2.05%

Earnings and Valuation

This table compares Bank Of Montreal and Northeast Community Bancorp”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank Of Montreal	$55.92 billion	2.20	$6.22 billion	$8.86	20.02
Northeast Community Bancorp	$158.21 million	2.36	$44.41 million	$3.12	8.69

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

Volatility and Risk

Bank Of Montreal has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Northeast Community Bancorp has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500.

Summary

Northeast Community Bancorp beats Bank Of Montreal on 10 of the 18 factors compared between the two stocks.

About Bank Of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.

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.