First Interstate BancSystem (NASDAQ:FIBK) versus Northeast Community Bancorp (NASDAQ:NECB) Critical Comparison

Northeast Community Bancorp (NASDAQ:NECB) and First Interstate BancSystem (NASDAQ:FIBK) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Institutional and Insider Ownership

53.2% of Northeast Community Bancorp shares are owned by institutional investors. Comparatively, 88.7% of First Interstate BancSystem shares are owned by institutional investors. 7.1% of Northeast Community Bancorp shares are owned by company insiders. Comparatively, 8.0% of First Interstate BancSystem shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Northeast Community Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.5%. First Interstate BancSystem pays an annual dividend of $1.88 per share and has a dividend yield of 5.0%. Northeast Community Bancorp pays out 32.9% of its earnings in the form of a dividend. First Interstate BancSystem pays out 58.6% 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Northeast Community Bancorp and First Interstate BancSystem, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Northeast Community Bancorp	0	1	2	2	3.20
First Interstate BancSystem	3	4	2	0	1.89

Northeast Community Bancorp currently has a consensus target price of $30.25, suggesting a potential upside of 4.64%. First Interstate BancSystem has a consensus target price of $37.14, suggesting a potential downside of 1.35%. Given Northeast Community Bancorp’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Northeast Community Bancorp is more favorable than First Interstate BancSystem.

Risk and Volatility

Northeast Community Bancorp has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, First Interstate BancSystem has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Earnings and Valuation

This table compares Northeast Community Bancorp and First Interstate BancSystem”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Community Bancorp	$158.21 million	2.52	$44.41 million	$3.04	9.51
First Interstate BancSystem	$1.41 billion	2.54	$302.10 million	$3.21	11.73

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

Profitability

This table compares Northeast Community Bancorp and First Interstate BancSystem’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Northeast Community Bancorp	27.21%	11.55%	1.99%
First Interstate BancSystem	29.18%	9.49%	1.20%

Summary

First Interstate BancSystem beats Northeast Community Bancorp on 10 of the 17 factors compared between the two stocks.

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.

About First Interstate BancSystem

First Interstate BancSystem, Inc. operates as the bank holding company for First Interstate Bank that provides range of banking products and services in the United States. It offers various traditional depository products, including checking, savings, and time deposits; and repurchase agreements primarily for commercial and municipal depositors. The company also offers real estate loans comprising commercial real estate, construction, residential, agricultural, and other real estate loans; consumer loans comprising direct personal loans, credit card loans and lines of credit, and indirect loans; variable and fixed rate commercial loans for small and medium-sized manufacturing, wholesale, retail, and service businesses for working capital needs and business expansions; and agricultural loans. In addition, it provides a range of trust, employee benefit, investment management, insurance, agency, and custodial services to individuals, businesses, and nonprofit organizations. Further, the company offers marketing, credit review, loan servicing, credit cards issuance and servicing, mortgage loan sales and servicing, indirect consumer loan purchasing and processing, loan collection services, other operational, and specialized staff support services, as well as online and mobile banking services. The company serves individuals, businesses, municipalities, and other entities in various industries, including agriculture, construction, education, governmental services, healthcare, hospitality, housing, professional services, real estate development, retail, technology, tourism, and wholesale trade. First Interstate BancSystem, Inc. was incorporated in 1971 and is headquartered in Billings, Montana.