Northeast Community Bancorp (NASDAQ:NECB – Get Rating) and ESSA Bancorp (NASDAQ:ESSA – Get Rating) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Analyst Recommendations

This is a summary of current recommendations for Northeast Community Bancorp and ESSA Bancorp, as provided by MarketBeat.com.

Northeast Community Bancorp currently has a consensus price target of $12.50, indicating a potential downside of 1.88%. Given Northeast Community Bancorp's higher possible upside, research analysts clearly believe Northeast Community Bancorp is more favorable than ESSA Bancorp.

Profitability

Volatility & Risk

Northeast Community Bancorp has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, ESSA Bancorp has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500.

Dividends

Northeast Community Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.9%. ESSA Bancorp pays an annual dividend of $0.60 per share and has a dividend yield of 2.9%. Northeast Community Bancorp pays out 26.7% of its earnings in the form of a dividend. ESSA Bancorp pays out 32.4% 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. ESSA Bancorp has increased its dividend for 2 consecutive years. ESSA Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

25.8% of Northeast Community Bancorp shares are held by institutional investors. Comparatively, 38.0% of ESSA Bancorp shares are held by institutional investors. 2.3% of Northeast Community Bancorp shares are held by company insiders. Comparatively, 6.5% of ESSA Bancorp shares are held by company 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.

Earnings and Valuation

This table compares Northeast Community Bancorp and ESSA Bancorp's top-line revenue, earnings per share and valuation.

ESSA Bancorp has higher revenue and earnings than Northeast Community Bancorp. ESSA 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.

Summary

ESSA Bancorp beats Northeast Community Bancorp on 9 of the 16 factors compared between the two stocks.

About Northeast Community Bancorp

(Get Rating)

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. 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 investment advisory and financial planning services; and life insurance products and fixed-rate annuities. It operates seven full-service branches in New York and three full-service branches in Massachusetts; and loan production offices in White Plains and New City, New York, as well as Danvers, Massachusetts. The company was founded in 1934 and is based in White Plains, New York.

About ESSA Bancorp

(Get Rating)

ESSA Bancorp, Inc. operates as a bank holding company for ESSA Bank & Trust that provides a range of financial services to individuals, families, and businesses in Pennsylvania. The company accepts savings accounts, interest bearing demand accounts, checking accounts, money market accounts, club accounts, certificates of deposit and IRAs, and other qualified plan accounts, as well as commercial checking accounts. Its loan portfolio includes first mortgage loans for the purchase, construction, or refinancing of one- to four-family residential real estate property; commercial real estate loans; home equity loans and lines of credit; and commercial and other consumer loans, as well as loans secured by deposits and personal unsecured loans. In addition, the company offers insurance benefits consulting services, such as health insurance, life insurance, short term and long term disability, dental, vision, 401(K) retirement planning, and individual health products, as well as asset management and trust, and investment services. As of September 30, 2021, it operated 21 community offices, including seven offices in Monroe County, three offices in Lehigh County, five offices in Northampton County, one office in Lackawanna County, one office in Luzerne County, one office in Chester County, two offices in Delaware County, and one office in Montgomery County, Pennsylvania. The company was founded in 1916 and is headquartered in Stroudsburg, Pennsylvania.

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