First BanCorp. (NYSE:FBP) versus Bankwell Financial Group (NASDAQ:BWFG) Critical Review
by Michael Walen · The Markets DailyBankwell Financial Group (NASDAQ:BWFG – Get Free Report) and First BanCorp. (NYSE:FBP – Get Free Report) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.
Risk and Volatility
Bankwell Financial Group has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, First BanCorp. has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.
Earnings and Valuation
This table compares Bankwell Financial Group and First BanCorp.”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bankwell Financial Group | $121.82 million | 4.32 | $35.20 million | $5.35 | 12.34 |
| First BanCorp. | $1.26 billion | 3.32 | $344.87 million | $2.37 | 11.53 |
First BanCorp. has higher revenue and earnings than Bankwell Financial Group. First 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 Recommendations
This is a summary of current ratings and target prices for Bankwell Financial Group and First BanCorp., as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bankwell Financial Group | 0 | 2 | 1 | 1 | 2.75 |
| First BanCorp. | 0 | 3 | 5 | 1 | 2.78 |
Bankwell Financial Group currently has a consensus target price of $67.50, indicating a potential upside of 2.22%. First BanCorp. has a consensus target price of $29.86, indicating a potential upside of 9.28%. Given First BanCorp.’s stronger consensus rating and higher probable upside, analysts clearly believe First BanCorp. is more favorable than Bankwell Financial Group.
Dividends
Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. First BanCorp. pays an annual dividend of $0.80 per share and has a dividend yield of 2.9%. Bankwell Financial Group pays out 15.0% of its earnings in the form of a dividend. First BanCorp. pays out 33.8% 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. First BanCorp. has raised its dividend for 6 consecutive years. First BanCorp. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
35.8% of Bankwell Financial Group shares are held by institutional investors. Comparatively, 97.9% of First BanCorp. shares are held by institutional investors. 21.0% of Bankwell Financial Group shares are held by company insiders. Comparatively, 1.9% of First BanCorp. shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Profitability
This table compares Bankwell Financial Group and First BanCorp.’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bankwell Financial Group | 19.80% | 13.94% | 1.27% |
| First BanCorp. | 29.24% | 18.03% | 1.84% |
Summary
First BanCorp. beats Bankwell Financial Group on 12 of the 17 factors compared between the two stocks.
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.
About First BanCorp.
First BanCorp. operates as a bank holding company for FirstBank Puerto Rico that provides a range of financial products and services to consumers and commercial customers. The company operates through six segments: Commercial and Corporate Banking, Mortgage Banking, Consumer (Retail) Banking, Treasury and Investments, United States Operations, and Virgin Islands Operations. The Commercial and Corporate Banking segment offers commercial loans, including commercial real estate and construction loans, as well as other products, such as cash management and business management services. The Mortgage Banking segment engages in the origination, sale, and servicing of various residential mortgage loans; hedging activities; and purchase of mortgage loans from branch and mortgage bankers. The Consumer (Retail) Banking segment provides auto loans, finance leases, boat and personal loans, credit card loans, and lines of credit; and interest-bearing and non-interest-bearing checking and savings accounts, and individual retirement accounts and retail certificates of deposit (CDs), as well as insurance agency services. The Treasury and Investments segment offers funding and liquidity management services. The United States Operations segment provides checking, savings, and money market accounts, as well as retail CDs; traditional commercial and industrial, and commercial real estate loans, residential mortgages, term and construction loan, home equity loans, lines of credit, FHLB advances, and brokered CDs; and internet banking, cash management, remote deposit capture, and automated clearing house transactions services. The Virgin Islands Operations segment is involved in consumer, commercial lending, and deposit-taking activities. First BanCorp. was founded in 1948 and is headquartered in San Juan, Puerto Rico.