Reviewing Timberland Bancorp (NASDAQ:TSBK) & Northeast Bancorp (NASDAQ:NBN)

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

Institutional & Insider Ownership

65.5% of Timberland Bancorp shares are owned by institutional investors. 3.6% of Timberland Bancorp shares are owned by insiders. Comparatively, 14.2% of Northeast 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.

Analyst Recommendations

This is a breakdown of recent recommendations for Timberland Bancorp and Northeast Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Timberland Bancorp	0	0	1	0	3.00
Northeast Bancorp	0	1	1	0	2.50

Northeast Bancorp has a consensus price target of $102.00, suggesting a potential downside of 12.54%. Given Northeast Bancorp’s higher possible upside, analysts clearly believe Northeast Bancorp is more favorable than Timberland Bancorp.

Volatility and Risk

Timberland Bancorp has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, Northeast Bancorp has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.

Dividends

Timberland Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 3.0%. Northeast Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Timberland Bancorp pays out 30.1% of its earnings in the form of a dividend. Northeast Bancorp pays out 0.4% 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. Timberland Bancorp has raised its dividend for 13 consecutive years. Timberland Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Timberland Bancorp	26.17%	11.73%	1.54%
Northeast Bancorp	24.16%	17.73%	2.06%

Valuation and Earnings

This table compares Timberland Bancorp and Northeast Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Timberland Bancorp	$114.63 million	2.68	$29.16 million	$3.86	10.11
Northeast Bancorp	$351.00 million	2.73	$83.44 million	$10.37	11.25

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

Summary

Northeast Bancorp beats Timberland Bancorp on 11 of the 16 factors compared between the two stocks.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.

About Northeast Bancorp

Northeast Bank provides banking services to individual and corporate customers in Maine. The company's deposit products include demand deposit, NOW, money market, savings, certificate of deposit, and individual retirement accounts, as well as checking accounts. Its loan portfolio comprises residential mortgage loans; multi-family and other commercial real estate loans; commercial and industrial loans, such as term loans, lines of credit and equipment, and receivables financing; consumer loans comprising mobile home and overdraft, and deposit-secured loans; and small business administration loans. In addition, the company offers telephone banking, online banking and bill payment, mobile banking, cash management, and remote deposit capture services, as well as debit and credit card, ATM, electronic transfer, and check services. Further, it provides various services, such as money market, merchant, and payroll and HR. Northeast Bank was founded in 1872 and is headquartered in Portland, Maine.