Comparing American Bank (OTCMKTS:AMBK) & Northeast Community Bancorp (NASDAQ:NECB)

American Bank (OTCMKTS:AMBK) and Northeast Community Bancorp (NASDAQ:NECB) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Institutional and Insider Ownership

53.3% of Northeast Community Bancorp shares are held by institutional investors. 6.3% of Northeast Community Bancorp shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for American Bank and Northeast Community Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Bank	0	0	0	0	0.00
Northeast Community Bancorp	0	2	0	0	2.00

Profitability

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

	Net Margins	Return on Equity	Return on Assets
American Bank	22.49%	N/A	N/A
Northeast Community Bancorp	27.97%	13.43%	2.23%

Earnings & Valuation

This table compares American Bank and Northeast Community Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Bank	$49.06 million	2.48	$9.02 million	$2.03	9.11
Northeast Community Bancorp	$162.80 million	1.97	$47.07 million	$3.27	7.00

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

Dividends

American Bank pays an annual dividend of $0.56 per share and has a dividend yield of 3.0%. Northeast Community Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 3.5%. American Bank pays out 27.6% of its earnings in the form of a dividend. Northeast Community Bancorp pays out 24.5% 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. 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 longer track record of dividend growth.

Summary

Northeast Community Bancorp beats American Bank on 12 of the 14 factors compared between the two stocks.

About American Bank

American Bank Incorporated operates as the bank holding company for American Bank that provides various banking products and services to consumer, business, institutional, and governmental customers. It accepts a range of interest-bearing checking and money market accounts, savings accounts, certificates of deposit, and individual retirement accounts. The company also offers commercial, industrial, and other loans; commercial mortgage loans; commercial construction loans; residential mortgage loans; and consumer loans, including personal term loans, personal credit lines, automobile loans, home equity loans, and home equity lines of credit and loans. In addition, it provides online or mobile banking, automated teller machine, safe deposit box rental, and wire transfer services, as well as sells checks and checkbooks, and purchases investment securities. The company operates an office located in Allentown, Pennsylvania; and a loan production office in Blue Bell, Pennsylvania. The company was founded in 1997 and is based in Allentown, Pennsylvania.

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.