Critical Contrast: FFW (OTCMKTS:FFWC) vs. Western New England Bancorp (NASDAQ:WNEB)

FFW (OTCMKTS:FFWC) and Western New England Bancorp (NASDAQ:WNEB) are both small-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Insider & Institutional Ownership

68.0% of Western New England Bancorp shares are held by institutional investors. 17.0% of FFW shares are held by insiders. Comparatively, 5.8% of Western New England Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares FFW and Western New England Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FFW	14.99%	N/A	N/A
Western New England Bancorp	9.51%	4.91%	0.45%

Dividends

FFW pays an annual dividend of $1.20 per share and has a dividend yield of 3.1%. Western New England Bancorp pays an annual dividend of $0.28 per share and has a dividend yield of 2.9%. FFW pays out 28.6% of its earnings in the form of a dividend. Western New England Bancorp pays out 50.0% 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. FFW is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and price targets for FFW and Western New England Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FFW	0	0	0	0	0.00
Western New England Bancorp	0	2	0	1	2.67

Western New England Bancorp has a consensus target price of $8.50, suggesting a potential downside of 10.99%. Given Western New England Bancorp’s stronger consensus rating and higher probable upside, analysts clearly believe Western New England Bancorp is more favorable than FFW.

Risk and Volatility

FFW has a beta of 0.05, indicating that its stock price is 95% less volatile than the S&P 500. Comparatively, Western New England Bancorp has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Earnings & Valuation

This table compares FFW and Western New England Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FFW	$29.39 million	1.46	$4.09 million	$4.19	9.31
Western New England Bancorp	$122.74 million	1.64	$11.67 million	$0.56	17.05

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

Summary

Western New England Bancorp beats FFW on 11 of the 16 factors compared between the two stocks.

About FFW

FFW Corporation operates as the bank holding company for Crossroads Bank that provides various banking products and services. The company offers checking and savings accounts, overdraft protection, consumer credit cards, and reorder checks. Its loan products include home equity, auto, RV, boat, motorcycle, and personal loans; mortgage loans; agricultural loans; commercial real estate equipment financing; revolving lines of credit and standby letters of credit; and equipment leasing, as well as commercial lending services. The company offers insurance products, such as auto, home and property, business, life and health, and specialty insurance; investment products and securities; and digital banking services. FFW Corporation was founded in 1920 and is based in Wabash, Indiana.

About Western New England Bancorp

Western New England Bancorp, Inc. operates as the holding company for Westfield Bank that provides a range of commercial and retail banking products and services to individuals and businesses. The company accepts various deposit accounts, including interest-bearing and noninterest-bearing checking, commercial checking, business, nonprofit and municipal checking, savings, money market and sweep, individual retirement, and other savings accounts; time deposits; certificates of deposit; and interest on lawyer's trust accounts. It also offers residential real estate loans, including first mortgages, home equity loans, and home equity lines, and secured by one-to-four family residential properties; commercial and industrial loans, such as letters of credit, revolving lines of credit, working capital, equipment financing, and term loans; commercial mortgage loans; construction and land development loans; home equity loans comprising home equity revolving loans and lines of credit; and consumer loans, including automobile, spa and pool, collateral, and personal lines of credit. In addition, the company provides automated teller machine (ATM), telephone and online banking, remote deposit capture, cash management, overdraft and safe deposit facility, and night deposit services. The company was formerly known as Westfield Financial, Inc. and changed its name to Western New England Bancorp, Inc. in October 2016. The company was founded in 1853 and is headquartered in Westfield, Massachusetts.