Analyzing Northeast Community Bancorp (NASDAQ:NECB) & HBT Financial (NASDAQ:HBT)

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

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HBT Financial	$266.65 million	4.81	$77.01 million	$2.33	15.15
Northeast Community Bancorp	$103.62 million	3.48	$44.41 million	$3.12	8.39

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

Analyst Recommendations

This is a breakdown of current ratings and price targets for HBT Financial and Northeast Community Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HBT Financial	0	2	4	1	2.86
Northeast Community Bancorp	0	2	1	1	2.75

HBT Financial currently has a consensus price target of $37.40, suggesting a potential upside of 5.98%. Northeast Community Bancorp has a consensus price target of $29.50, suggesting a potential upside of 12.64%. Given Northeast Community Bancorp’s higher probable upside, analysts plainly believe Northeast Community Bancorp is more favorable than HBT Financial.

Dividends

HBT Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Northeast Community Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 3.8%. HBT Financial pays out 42.9% of its earnings in the form of a dividend. Northeast Community Bancorp pays out 32.1% 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. HBT Financial has increased its dividend for 5 consecutive years and 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 lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
HBT Financial	23.44%	13.46%	1.55%
Northeast Community Bancorp	27.67%	12.00%	2.05%

Insider & Institutional Ownership

78.6% of HBT Financial shares are owned by institutional investors. Comparatively, 53.2% of Northeast Community Bancorp shares are owned by institutional investors. 51.9% of HBT Financial shares are owned by insiders. Comparatively, 7.1% of Northeast Community Bancorp shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility & Risk

HBT Financial has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Northeast Community Bancorp has a beta of 0.36, indicating that its share price is 64% less volatile than the S&P 500.

Summary

HBT Financial beats Northeast Community Bancorp on 11 of the 17 factors compared between the two stocks.

About HBT Financial

HBT Financial, Inc. operates as the bank holding company for Heartland Bank and Trust Company that provides business, commercial, and retail banking products and services to individuals, businesses, and municipal entities in Central and Northeastern Illinois, and Eastern Iowa. The company's deposits accounts consist of noninterest-bearing demand deposits, interest-bearing transaction accounts, money market accounts, savings accounts, certificates of deposits, health savings accounts, and individual retirement accounts. Its loan offering comprises owner and non-owner occupied commercial real estate; construction and land development and multi-family; commercial and industrial; agricultural and farmland; and one-to-four family residential loans, as well as municipal, consumer, and other loans. The company also offers wealth management services, including financial planning to consumers, trusts, and estates; trustee and custodial; investment management; corporate retirement plan consulting and administration; and retail brokerage services. In addition, it provides farmland management, and farmland sales and services; commercial checking accounts; and treasury management services, as well as originates and sells residential mortgage loans. Further, the company offers digital banking services, such as online and mobile banking, and digital payment services, as well as personal financial management tools. The company was formerly known as Heartland Bancorp, Inc. and changed its name to HBT Financial, Inc. in September 2019. HBT Financial, Inc. was founded in 1920 and is headquartered in Bloomington, Illinois.

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.