Critical Analysis: Flushing Financial (NASDAQ:FFIC) & Parke Bancorp (NASDAQ:PKBK)

Flushing Financial (NASDAQ:FFIC) and Parke Bancorp (NASDAQ:PKBK) are both small-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Insider and Institutional Ownership

67.1% of Flushing Financial shares are owned by institutional investors. Comparatively, 49.7% of Parke Bancorp shares are owned by institutional investors. 6.3% of Flushing Financial shares are owned by insiders. Comparatively, 15.3% of Parke Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Flushing Financial has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500. Comparatively, Parke Bancorp has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500.

Dividends

Flushing Financial pays an annual dividend of $0.88 per share and has a dividend yield of 6.7%. Parke Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 4.4%. Flushing Financial pays out 88.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Parke Bancorp pays out 37.3% of its earnings in the form of a dividend. Parke Bancorp has increased its dividend for 9 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations for Flushing Financial and Parke Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flushing Financial	0	2	1	0	2.33
Parke Bancorp	0	0	0	0	N/A

Flushing Financial currently has a consensus price target of $15.17, suggesting a potential upside of 14.99%. Given Flushing Financial’s higher probable upside, analysts clearly believe Flushing Financial is more favorable than Parke Bancorp.

Earnings & Valuation

This table compares Flushing Financial and Parke Bancorp’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flushing Financial	$195.10 million	1.97	$28.66 million	$1.00	13.19
Parke Bancorp	$67.09 million	2.89	$28.46 million	$1.93	8.38

Flushing Financial has higher revenue and earnings than Parke Bancorp. Parke Bancorp is trading at a lower price-to-earnings ratio than Flushing Financial, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Flushing Financial and Parke Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flushing Financial	6.81%	4.31%	0.34%
Parke Bancorp	19.22%	10.91%	1.54%

About Flushing Financial

Flushing Financial Corporation operates as the bank holding company for Flushing Bank that provides banking products and services primarily to consumers, businesses, and governmental units. It offers various deposit products, including checking and savings accounts, money market accounts, non-interest bearing demand accounts, NOW accounts, and certificates of deposit. The company also provides mortgage loans secured by multi-family residential, commercial real estate, one-to-four family mixed-use property, one-to-four family residential property, and commercial business loans; construction loans; small business administration loans and other small business loans; mortgage loan surrogates, such as mortgage-backed securities; and consumer loans, including overdraft lines of credit, as well as the United States government securities, corporate fixed-income securities, and other marketable securities. It operates full-service banking offices in Queens, Nassau, Suffolk, Kings, and New York counties, New York; and an internet branch under the iGObanking and BankPurely brands. Flushing Financial Corporation was founded in 1929 and is based in Uniondale, New York.

About Parke Bancorp

Parke Bancorp, Inc. operates as the bank holding company for Parke Bank that provides personal and business financial services to individuals and small to mid-sized businesses. The company offers various deposit products, including checking, savings, time, money market, and individual retirement accounts, as well as certificates of deposit. Its loan portfolio comprises commercial and industrial, construction, commercial and residential real estate mortgage, and consumer loans. In addition, the company provides debit cards, internet banking, and online bill payment services. Parke Bancorp, Inc. was founded in 1999 and is headquartered in Washington Township, New Jersey.