In an analysis of two small-cap finance companies, Greystone Housing Impact Investors (NYSE: GHI) emerges with a more favorable outlook compared to Finward Bancorp (NASDAQ: FNWD). This article evaluates both firms through various financial metrics, including profitability, valuation, risk, institutional ownership, earnings, analyst recommendations, and dividends.
Volatility and Risk Assessment
Greystone Housing Impact Investors exhibits a beta of 0.57, indicating its share price is 43% less volatile than the S&P 500 index. In contrast, Finward Bancorp has a lower beta of 0.31, reflecting 69% lower volatility compared to the index. This suggests that both companies are less susceptible to market fluctuations, but Finward Bancorp shows a slightly more stable performance relative to market changes.
Ownership Structure
Institutional ownership plays a significant role in assessing a company’s potential for growth. Currently, 9.0% of Greystone’s shares are held by institutional investors, whereas Finward Bancorp has a higher institutional ownership at 26.6%. Additionally, insider ownership at Greystone stands at 1.8%, while Finward has 13.1% of its shares held by company insiders. This higher institutional ownership suggests greater confidence from large investors in Finward Bancorp’s long-term prospects.
Analysts have provided varying recommendations based on their evaluations of these companies. Greystone Housing Impact Investors has a consensus target price of $13.00, implying a potential upside of 62.40%. In contrast, Finward Bancorp’s consensus target price is $34.00, suggesting a potential downside of 5.32%. The higher anticipated upside for Greystone indicates a more favorable view among analysts.
Dividend Yield Comparison
In terms of dividend payments, Greystone Housing Impact Investors pays an annual dividend of $1.00 per share, resulting in a substantial dividend yield of 12.5%. Conversely, Finward Bancorp offers a lower annual dividend of $0.48 per share, translating to a yield of 1.3%. Greystone’s high payout ratio of 555.6% of its earnings raises concerns regarding its sustainability, while Finward Bancorp maintains a more manageable payout ratio of 25.1%. Notably, Greystone has increased its dividend for four consecutive years, showcasing a commitment to returning value to shareholders.
Earnings and Valuation Metrics
A review of earnings metrics reveals that Greystone Housing Impact Investors has higher earnings compared to Finward Bancorp, despite reporting lower revenue. Finward Bancorp is currently trading at a lower price-to-earnings ratio, indicating that it is more affordable than Greystone Housing Impact Investors. This presents a potential opportunity for investors seeking value.
Profitability metrics further elucidate the strengths of each company. Greystone leads in terms of net margins, return on equity, and return on assets, indicating a robust operational efficiency that outperforms Finward Bancorp in these key areas.
Overall, Greystone Housing Impact Investors surpasses Finward Bancorp in 12 out of 17 comparative factors, suggesting a stronger performance in various critical aspects of business operations and financial health.
Company Overviews
Greystone Housing Impact Investors LP, based in Omaha, Nebraska, specializes in acquiring and managing a portfolio of mortgage revenue bonds (MRBs) aimed at financing multifamily, student, and senior housing, as well as skilled nursing and commercial properties in the United States. Established in 1998 and formerly known as America First Multifamily Investors, L.P., the company rebranded in December 2022.
Finward Bancorp, headquartered in Munster, Indiana, serves as the holding company for Peoples Bank, which offers a wide range of banking products and services. Founded in 1916, the company provides various deposit and loan products, as well as wealth management services. It was formerly known as NorthWest Indiana Bancorp before rebranding in May 2021.
In conclusion, while both companies have their merits, Greystone Housing Impact Investors demonstrates a stronger position in terms of potential growth, dividends, and operational efficiency. Investors should weigh these factors when considering opportunities in the small-cap finance sector.
