Red River Bancshares (NASDAQ:RRBI) vs. First Financial Northwest (NASDAQ:FFNW) Critical Comparison

First Financial Northwest (NASDAQ:FFNW) and Red River Bancshares (NASDAQ:RRBI) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Volatility and Risk

First Financial Northwest has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Red River Bancshares has a beta of 0.62, meaning that its share price is 38% less volatile than the S&P 500.

Insider and Institutional Ownership

55.0% of First Financial Northwest shares are held by institutional investors. Comparatively, 27.5% of Red River Bancshares shares are held by institutional investors. 7.2% of First Financial Northwest shares are held by insiders. Comparatively, 16.5% of Red River Bancshares shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

First Financial Northwest pays an annual dividend of $0.26 per share and has a dividend yield of 1.2%. Red River Bancshares pays an annual dividend of $0.36 per share and has a dividend yield of 0.6%. First Financial Northwest pays out 236.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Red River Bancshares pays out 7.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations for First Financial Northwest and Red River Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Northwest	0	3	0	0	2.00
Red River Bancshares	0	0	0	0	0.00

First Financial Northwest presently has a consensus price target of $23.00, indicating a potential upside of 7.83%. Given First Financial Northwest’s stronger consensus rating and higher probable upside, equities analysts plainly believe First Financial Northwest is more favorable than Red River Bancshares.

Profitability

This table compares First Financial Northwest and Red River Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Northwest	1.31%	0.66%	0.07%
Red River Bancshares	21.42%	10.76%	1.08%

Valuation and Earnings

This table compares First Financial Northwest and Red River Bancshares”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Northwest	$38.37 million	5.13	$6.30 million	$0.11	193.91
Red River Bancshares	$106.72 million	3.52	$34.88 million	$4.75	11.67

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

Summary

Red River Bancshares beats First Financial Northwest on 9 of the 15 factors compared between the two stocks.

About First Financial Northwest

First Financial Northwest, Inc. operates as the bank holding company for First Financial Northwest Bank that provides commercial banking services in Washington. The company offers a range of deposit products, including noninterest-bearing accounts, interest-bearing demand accounts, money market accounts, savings accounts, and certificates of deposit. Its loan products comprise one-to-four family residential loans; multifamily and commercial real estate loans; construction/land loans; business loans; and consumer loans, such as home equity loans, lines of credit, second mortgage term loans, auto loans, and savings account loans. The company also provides wealth management services; and online banking services, as well as debit cards and ATMs. The company was founded in 1923 and is headquartered in Renton, Washington.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.