Contrasting Civista Bancshares (NASDAQ:CIVB) & Bankwell Financial Group (NASDAQ:BWFG)

Civista Bancshares (NASDAQ:CIVB) and Bankwell Financial Group (NASDAQ:BWFG) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Civista Bancshares and Bankwell Financial Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Civista Bancshares	0	3	1	0	2.25
Bankwell Financial Group	0	0	1	0	3.00

Civista Bancshares presently has a consensus target price of $18.25, indicating a potential upside of 5.37%. Bankwell Financial Group has a consensus target price of $34.00, indicating a potential upside of 14.36%. Given Bankwell Financial Group’s stronger consensus rating and higher probable upside, analysts clearly believe Bankwell Financial Group is more favorable than Civista Bancshares.

Risk and Volatility

Civista Bancshares has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Bankwell Financial Group has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500.

Institutional & Insider Ownership

52.1% of Civista Bancshares shares are held by institutional investors. Comparatively, 35.8% of Bankwell Financial Group shares are held by institutional investors. 3.0% of Civista Bancshares shares are held by company insiders. Comparatively, 19.2% of Bankwell Financial Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Civista Bancshares pays an annual dividend of $0.64 per share and has a dividend yield of 3.7%. Bankwell Financial Group pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. Civista Bancshares pays out 27.5% of its earnings in the form of a dividend. Bankwell Financial Group pays out 20.8% 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. Civista Bancshares has increased its dividend for 13 consecutive years. Civista Bancshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Civista Bancshares and Bankwell Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Civista Bancshares	14.48%	9.24%	0.86%
Bankwell Financial Group	11.76%	8.76%	0.73%

Valuation & Earnings

This table compares Civista Bancshares and Bankwell Financial Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Civista Bancshares	$151.19 million	1.80	$42.96 million	$2.33	7.43
Bankwell Financial Group	$90.82 million	2.59	$36.66 million	$3.84	7.74

Civista Bancshares has higher revenue and earnings than Bankwell Financial Group. Civista Bancshares 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.

About Civista Bancshares

Civista Bancshares, Inc. operates as the financial holding company for Civista Bank that provides community banking services. It collects a range of customer deposits; and offers commercial and agriculture, commercial and residential real estate, farm real estate, real estate construction, consumer, and other loans, as well as letters of credit. The company also holds and manages securities portfolio; leases general equipment; and provides captive insurance products. It operates in North Central, West Central, South Western Ohio, South Eastern Indiana, and Northern Kentucky. The company was formerly known as First Citizens Banc Corp and changed its name to Civista Bancshares, Inc. in May 2015. Civista Bancshares, Inc. was founded in 1884 and is headquartered in Sandusky, Ohio.

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.