Financial Contrast: American Bank (OTCMKTS:AMBK) and Northeast Community Bancorp (NASDAQ:NECB)

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

Dividends

Northeast Community Bancorp pays an annual dividend of $0.80 per share and has a dividend yield of 3.5%. American Bank pays an annual dividend of $0.56 per share and has a dividend yield of 3.4%. Northeast Community Bancorp pays out 24.5% of its earnings in the form of a dividend. American Bank pays out 27.6% 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. Northeast Community Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

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

Insider & Institutional Ownership

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

Volatility & Risk

Northeast Community Bancorp has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500. Comparatively, American Bank has a beta of 0.01, indicating that its stock price is 99% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Northeast Community Bancorp and American Bank, as provided by MarketBeat.com.

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

Valuation & Earnings

This table compares Northeast Community Bancorp and American Bank”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Northeast Community Bancorp	$162.80 million	1.96	$47.07 million	$3.27	6.96
American Bank	$49.06 million	2.21	$9.02 million	$2.03	8.13

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.

Summary

Northeast Community Bancorp beats American Bank on 13 of the 15 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 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.