OptimumBank (NASDAQ:OPHC) vs. Northwest Bancshares (NASDAQ:NWBI) Financial Review

OptimumBank (NASDAQ:OPHC) and Northwest Bancshares (NASDAQ:NWBI) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, earnings, profitability, risk, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of current ratings for OptimumBank and Northwest Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
OptimumBank	0	1	0	0	2.00
Northwest Bancshares	1	1	0	0	1.50

OptimumBank currently has a consensus target price of $5.25, suggesting a potential upside of 20.69%. Northwest Bancshares has a consensus target price of $11.00, suggesting a potential downside of 3.68%. Given OptimumBank’s stronger consensus rating and higher possible upside, equities analysts plainly believe OptimumBank is more favorable than Northwest Bancshares.

Institutional & Insider Ownership

7.4% of OptimumBank shares are held by institutional investors. Comparatively, 66.3% of Northwest Bancshares shares are held by institutional investors. 13.9% of OptimumBank shares are held by insiders. Comparatively, 1.0% of Northwest Bancshares shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

OptimumBank has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, Northwest Bancshares has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500.

Profitability

This table compares OptimumBank and Northwest Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
OptimumBank	16.43%	10.53%	0.98%
Northwest Bancshares	17.84%	8.77%	0.93%

Valuation and Earnings

This table compares OptimumBank and Northwest Bancshares’ revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
OptimumBank	$30.37 million	1.38	$6.28 million	$1.02	4.26
Northwest Bancshares	$701.74 million	2.07	$134.96 million	$1.03	11.09

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

Summary

Northwest Bancshares beats OptimumBank on 8 of the 13 factors compared between the two stocks.

About OptimumBank

OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides various consumer and commercial banking services to individuals and businesses. It accepts demand interest-bearing and noninterest-bearing, savings, money market, and NOW accounts, as well as time deposits, wire transfers, ACH services, and certificates of deposit. The company also offers residential and commercial real estate, multi-family real estate, land and construction loans; commercial loans are generally used for working capital purposes or for acquiring equipment, inventory, and furniture; and consumer loans for various purposes, including purchases of automobiles, recreational vehicles, boats, home improvements, lines of credit, personal, and deposit account collateralized loans. In addition, it provides Visa debit and ATM cards; cash management, notary, and night depository services; and direct deposits, money orders, cashier's checks, domestic collections, and banking by mail, as well as internet banking services. The company was founded in 2000 and is based in Fort Lauderdale, Florida.

About Northwest Bancshares

Northwest Bancshares, Inc. operates as the bank holding company for Northwest Bank, a state-chartered savings bank that provides personal and business banking solutions. The company accepts various deposits, including checking, savings, money market deposit, term certificate, and individual retirement accounts. It also offers loan products comprising one-to-four-family residential real estate loans, shorter term consumer loans, and loans collateralized by multi-family residential and commercial real estate; home equity loans and lines of credit; commercial business and real estate loans; commercial loans; and consumer loans, including automobile loans, sales finance loans, unsecured personal loans, credit card loans, and loans secured by investment accounts, as well as investment management and trust services. The company operates community banking locations in Pennsylvania, Western New York, Eastern Ohio, and Indiana. Northwest Bancshares, Inc. was founded in 1896 and is headquartered in Columbus, Ohio.