Critical Survey: Flagstar Bank, National Association (NYSE:FLG) and Capital Bancorp (NASDAQ:CBNK)

Flagstar Bank, National Association (NYSE:FLG) and Capital Bancorp (NASDAQ:CBNK) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Valuation & Earnings

This table compares Flagstar Bank, National Association and Capital Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flagstar Bank, National Association	$6.35 billion	0.87	-$1.12 billion	($0.97)	-13.77
Capital Bancorp	$244.71 million	1.96	$30.97 million	$2.94	9.88

Capital Bancorp has lower revenue, but higher earnings than Flagstar Bank, National Association. Flagstar Bank, National Association is trading at a lower price-to-earnings ratio than Capital Bancorp, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

67.9% of Flagstar Bank, National Association shares are held by institutional investors. Comparatively, 56.1% of Capital Bancorp shares are held by institutional investors. 19.4% of Flagstar Bank, National Association shares are held by insiders. Comparatively, 31.6% of Capital Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Flagstar Bank, National Association pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Capital Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 1.7%. Flagstar Bank, National Association pays out -4.1% of its earnings in the form of a dividend. Capital Bancorp pays out 16.3% 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. Capital Bancorp has increased its dividend for 3 consecutive years. Capital Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Flagstar Bank, National Association and Capital Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flagstar Bank, National Association	-7.06%	-3.80%	-0.30%
Capital Bancorp	16.41%	15.13%	1.70%

Analyst Ratings

This is a breakdown of current ratings for Flagstar Bank, National Association and Capital Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flagstar Bank, National Association	2	5	5	0	2.25
Capital Bancorp	1	2	2	0	2.20

Flagstar Bank, National Association presently has a consensus price target of $14.32, suggesting a potential upside of 7.17%. Capital Bancorp has a consensus price target of $34.33, suggesting a potential upside of 18.23%. Given Capital Bancorp’s higher possible upside, analysts clearly believe Capital Bancorp is more favorable than Flagstar Bank, National Association.

Risk & Volatility

Flagstar Bank, National Association has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500. Comparatively, Capital Bancorp has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500.

Summary

Capital Bancorp beats Flagstar Bank, National Association on 11 of the 17 factors compared between the two stocks.

About Flagstar Bank, National Association

Flagstar Financial, Inc. operates as the bank holding company for Flagstar Bank, N.A. that provides banking products and services in the United States. The company’s deposit products include interest-bearing checking and money market, savings, non-interest-bearing, and retirement accounts, as well as certificates of deposit. Its loan products comprise multi-family loans; commercial real estate loans; acquisition, development, and construction loans; commercial and industrial loans; one-to-four family loans; specialty finance loans and leases; warehouse loans; and other loans, such as home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans, and other consumer loans, including overdraft loans. The company offers cash management products; non-deposit investment and insurance products; and online banking, mobile banking, and bank-by-phone services. It primarily serves individuals, small and mid-size businesses, and professional associations. The company was formerly known as New York Community Bancorp, Inc. and changed its name to Flagstar Financial, Inc. in October 2024. Flagstar Financial, Inc. was founded in 1859 and is headquartered in Hicksville, New York.

About Capital Bancorp

Capital Bancorp, Inc. operates as the bank holding company for Capital Bank, N.A. that provides various banking products and services to businesses, not-for-profit associations, and entrepreneurs in Maryland, Virginia, and the District of Columbia. It operates through Commercial Banking, Capital Bank Home Loans, and OpenSky segments. The company offers a range of deposit products, including checking and savings, time, interest bearing and noninterest-bearing demand, and money market accounts, as well as certificates of deposit; and credit cards. It also originates residential mortgages; issues trust preferred securities; and provides residential and commercial real estate, construction, and commercial and industrial loans, as well as other consumer loans, such as term loans, car loans, and boat loans to small to medium-sized businesses, professionals, real estate investors, and small residential builders and individuals. Capital Bancorp, Inc. was founded in 1974 and is headquartered in Rockville, Maryland.