Berkshire Hills Bancorp (NYSE:BHLB) and FS Bancorp (NASDAQ:FSBW) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.
Risk & Volatility
Berkshire Hills Bancorp has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500. Comparatively, FS Bancorp has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500.
Earnings and Valuation
This table compares Berkshire Hills Bancorp and FS Bancorp's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Berkshire Hills Bancorp | $593.52 million | 1.78 | $97.45 million | $2.40 | 8.64 |
FS Bancorp | $112.66 million | 2.40 | $22.72 million | $5.14 | 12.38 |
Berkshire Hills Bancorp has higher revenue and earnings than FS Bancorp. Berkshire Hills Bancorp is trading at a lower price-to-earnings ratio than FS Bancorp, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
75.5% of Berkshire Hills Bancorp shares are owned by institutional investors. Comparatively, 57.0% of FS Bancorp shares are owned by institutional investors. 5.6% of Berkshire Hills Bancorp shares are owned by company insiders. Comparatively, 9.4% of FS Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Analyst Ratings
This is a summary of recent recommendations and price targets for Berkshire Hills Bancorp and FS Bancorp, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Berkshire Hills Bancorp | 0 | 2 | 2 | 0 | 2.50 |
FS Bancorp | 0 | 0 | 1 | 0 | 3.00 |
Berkshire Hills Bancorp currently has a consensus price target of $17.50, indicating a potential downside of 15.62%. FS Bancorp has a consensus price target of $70.00, indicating a potential upside of 9.98%. Given FS Bancorp's stronger consensus rating and higher possible upside, analysts plainly believe FS Bancorp is more favorable than Berkshire Hills Bancorp.
Dividends
Berkshire Hills Bancorp pays an annual dividend of $0.48 per share and has a dividend yield of 2.3%. FS Bancorp pays an annual dividend of $1.04 per share and has a dividend yield of 1.6%. Berkshire Hills Bancorp pays out 20.0% of its earnings in the form of a dividend. FS Bancorp pays out 20.2% 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. FS Bancorp has increased its dividend for 1 consecutive years. Berkshire Hills Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.
Profitability
This table compares Berkshire Hills Bancorp and FS Bancorp's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Berkshire Hills Bancorp | -102.52% | 3.61% | 0.40% |
FS Bancorp | 25.17% | 16.29% | 1.77% |
Summary
FS Bancorp beats Berkshire Hills Bancorp on 11 of the 17 factors compared between the two stocks.