Contrasting First Internet Bancorp (NASDAQ:INBK) & Bankwell Financial Group (NASDAQ:BWFG)

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

Dividends

First Internet Bancorp pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Bankwell Financial Group pays an annual dividend of $0.52 per share and has a dividend yield of 1.8%. First Internet Bancorp pays out 9.6% of its earnings in the form of a dividend. Bankwell Financial Group pays out 21.8% 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.

Valuation and Earnings

This table compares First Internet Bancorp and Bankwell Financial Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Internet Bancorp $124.23 million 1.75 $21.90 million $2.50 8.94
Bankwell Financial Group $83.96 million 2.70 $17.43 million $2.39 12.10

First Internet Bancorp has higher revenue and earnings than Bankwell Financial Group. First Internet Bancorp 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 for First Internet Bancorp and Bankwell Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Internet Bancorp 0 3 0 0 2.00
Bankwell Financial Group 0 0 1 0 3.00

First Internet Bancorp presently has a consensus price target of $25.00, indicating a potential upside of 11.86%. Bankwell Financial Group has a consensus price target of $34.00, indicating a potential upside of 17.57%. Given Bankwell Financial Group’s stronger consensus rating and higher possible upside, analysts plainly believe Bankwell Financial Group is more favorable than First Internet Bancorp.

Profitability

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

Net Margins Return on Equity Return on Assets
First Internet Bancorp 14.03% 8.05% 0.62%
Bankwell Financial Group 20.15% 11.03% 1.04%

Risk and Volatility

First Internet Bancorp has a beta of 0.61, meaning that its stock price is 39% less volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500.

Institutional & Insider Ownership

71.2% of First Internet Bancorp shares are owned by institutional investors. Comparatively, 53.6% of Bankwell Financial Group shares are owned by institutional investors. 5.6% of First Internet Bancorp shares are owned by company insiders. Comparatively, 16.3% of Bankwell Financial Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Bankwell Financial Group beats First Internet Bancorp on 10 of the 16 factors compared between the two stocks.

First Internet Bancorp Company Profile

First Internet Bancorp operates as a bank holding company for First Internet Bank of Indiana that provides commercial and retail banking products and services in the United States. The company offers savings and money market accounts, non-interest bearing and interest-bearing demand deposits, brokered deposit accounts, and certificates of deposit. It also provides commercial and industrial, owner-occupied commercial real estate, investor commercial real estate, construction, residential mortgage, term, small installment, home improvement, home equity, and other consumer loans, as well as single tenant lease financing, public and healthcare finance, lines of credit, and letters of credit to individuals and commercial customers. In addition, the company is involved in the purchase, manage, service, and safekeeping of municipal securities; and offers municipal lending and leasing products to government entities. In addition, it provides corporate credit card and treasury management services. The company offers its services through its Website, www.firstib.com. First Internet Bancorp was founded in 1999 and is based in Fishers, Indiana.

Bankwell Financial Group Company Profile

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides a range of banking services to commercial and consumer customers in Connecticut. It accepts checking, savings, and money market accounts; and time, demand, and NOW deposits, as well as certificates of deposit. The company also provides commercial lending products, including residential real estate loans, owner-occupied commercial real estate loans, commercial real estate investment loans, business term loans, equipment financing, and lines of credit to small and mid-sized businesses, as well as real estate construction and development loans; and consumer loans, such as loans secured by savings or certificate accounts, or automobiles, as well as unsecured personal loans and overdraft lines of credit. As of June 9, 2018, it operated through a network of 12 branches. 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.

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