Critical Review: Western New England Bancorp (NASDAQ:WNEB) & Catalyst Bancorp (NASDAQ:CLST)

Catalyst Bancorp (NASDAQ:CLST) and Western New England Bancorp (NASDAQ:WNEB) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, valuation, dividends, profitability, risk and analyst recommendations.

Volatility and Risk

Catalyst Bancorp has a beta of 0.13, indicating that its share price is 87% less volatile than the S&P 500. Comparatively, Western New England Bancorp has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500.

Earnings and Valuation

This table compares Catalyst Bancorp and Western New England Bancorp’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Catalyst Bancorp	$11.25 million	4.61	$600,000.00	($1.02)	-11.24
Western New England Bancorp	$112.01 million	1.20	$15.07 million	$0.60	10.40

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

Profitability

This table compares Catalyst Bancorp and Western New England Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Catalyst Bancorp	5.35%	-4.99%	-1.54%
Western New England Bancorp	11.10%	5.43%	0.50%

Analyst Ratings

This is a breakdown of current ratings and price targets for Catalyst Bancorp and Western New England Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Catalyst Bancorp	0	0	0	0	N/A
Western New England Bancorp	0	2	1	0	2.33

Western New England Bancorp has a consensus target price of $7.50, suggesting a potential upside of 20.19%. Given Western New England Bancorp’s higher possible upside, analysts clearly believe Western New England Bancorp is more favorable than Catalyst Bancorp.

Institutional & Insider Ownership

33.1% of Catalyst Bancorp shares are owned by institutional investors. Comparatively, 68.0% of Western New England Bancorp shares are owned by institutional investors. 5.9% of Catalyst Bancorp shares are owned by company insiders. Comparatively, 5.8% of Western New England Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Western New England Bancorp beats Catalyst Bancorp on 11 of the 13 factors compared between the two stocks.

About Catalyst Bancorp

Catalyst Bancorp, Inc. operates as a holding company for Catalyst Bank that provides various banking services to individuals and businesses in Louisiana. The company accepts various deposit products, including savings accounts, demand and NOW accounts, money market accounts, and certificates of deposit. It also offers single family residential first mortgage loans, commercial real estate mortgage loans, multi-family residential mortgage loans, commercial and industrial loans, construction and land loans, consumer loans, and other loans. In addition, the company invests in various types of securities comprising mortgage-backed securities, the U.S. treasury obligations, securities of various federal agencies and of state and municipal governments, certificates of deposit at federally insured banks and savings institutions, and federal funds. Catalyst Bancorp, Inc. was founded in 1922 and is headquartered in Opelousas, Louisiana.

About Western New England Bancorp

Western New England Bancorp, Inc. operates as the holding company for Westfield Bank that provides a range of commercial and retail banking products and services to individuals and businesses. The company accepts various deposit accounts, including interest-bearing and noninterest-bearing checking, commercial checking, business, nonprofit and municipal checking, savings, money market and sweep, individual retirement, and other savings accounts; time deposits; certificates of deposit; and interest on lawyer's trust accounts. It also offers residential real estate loans, including first mortgages, home equity loans, and home equity lines, and secured by one-to-four family residential properties; commercial and industrial loans, such as letters of credit, revolving lines of credit, working capital, equipment financing, and term loans; commercial mortgage loans; construction and land development loans; home equity loans comprising home equity revolving loans and lines of credit; and consumer loans, including automobile, spa and pool, collateral, and personal lines of credit. In addition, the company provides automated teller machine (ATM), telephone and online banking, remote deposit capture, cash management, overdraft and safe deposit facility, and night deposit services. The company was formerly known as Westfield Financial, Inc. and changed its name to Western New England Bancorp, Inc. in October 2016. The company was founded in 1853 and is headquartered in Westfield, Massachusetts.