Bankwell Financial Group (NASDAQ:BWFG) versus LINKBANCORP (NASDAQ:LNKB) Critical Survey

LINKBANCORP (NASDAQ:LNKB) and Bankwell Financial Group (NASDAQ:BWFG) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, earnings, risk, valuation, institutional ownership, dividends and analyst recommendations.

Volatility and Risk

LINKBANCORP has a beta of 0.4, indicating that its share price is 60% less volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500.

Dividends

LINKBANCORP pays an annual dividend of $0.30 per share and has a dividend yield of 3.4%. Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.7%. LINKBANCORP pays out 33.3% of its earnings in the form of a dividend. Bankwell Financial Group pays out 18.0% 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.

Earnings and Valuation

This table compares LINKBANCORP and Bankwell Financial Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LINKBANCORP	$186.50 million	1.76	$26.21 million	$0.90	9.72
Bankwell Financial Group	$207.71 million	1.83	$9.77 million	$4.44	10.85

LINKBANCORP has higher earnings, but lower revenue than Bankwell Financial Group. LINKBANCORP is trading at a lower price-to-earnings ratio than Bankwell Financial Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for LINKBANCORP and Bankwell Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LINKBANCORP	0	2	1	1	2.75
Bankwell Financial Group	0	2	2	0	2.50

LINKBANCORP presently has a consensus target price of $9.63, indicating a potential upside of 10.00%. Bankwell Financial Group has a consensus target price of $47.50, indicating a potential downside of 1.43%. Given LINKBANCORP’s stronger consensus rating and higher possible upside, equities research analysts plainly believe LINKBANCORP is more favorable than Bankwell Financial Group.

Insider & Institutional Ownership

37.5% of LINKBANCORP shares are owned by institutional investors. Comparatively, 35.8% of Bankwell Financial Group shares are owned by institutional investors. 37.5% of LINKBANCORP shares are owned by insiders. Comparatively, 19.5% of Bankwell Financial Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares LINKBANCORP and Bankwell Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LINKBANCORP	17.97%	8.85%	0.90%
Bankwell Financial Group	16.94%	12.40%	1.09%

Summary

Bankwell Financial Group beats LINKBANCORP on 9 of the 17 factors compared between the two stocks.

About LINKBANCORP

LINKBANCORP, Inc. operates as a bank holding company for The Gratz Bank, that provides various banking products and services to individuals, families, nonprofit, and business customers in Pennsylvania. Its deposit products include demand, saving, and money market accounts, as well as certificates of deposits. The company also offers commercial real estate, commercial business, commercial real estate construction, land development, residential real estate, home equity, consumer, agricultural, and municipal loans. It also provides online banking, mobile banking, direct and remote deposit, and cash management services. The company was incorporated in 2018 and is headquartered in Camp Hill, Pennsylvania.

About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans to finance insurance premiums; overdraft lines of credit; and unsecured personal loans. It operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.