Reviewing First Financial Northwest (NASDAQ:FFNW) and Orange County Bancorp (NASDAQ:OBT)

First Financial Northwest (NASDAQ:FFNW) and Orange County Bancorp (NASDAQ:OBT) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, dividends, risk, profitability, institutional ownership and earnings.

Institutional & Insider Ownership

55.0% of First Financial Northwest shares are held by institutional investors. Comparatively, 42.6% of Orange County Bancorp shares are held by institutional investors. 7.2% of First Financial Northwest shares are held by company insiders. Comparatively, 10.5% of Orange County 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for First Financial Northwest and Orange County Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
First Financial Northwest	0	2	0	0	2.00
Orange County Bancorp	0	0	1	0	3.00

First Financial Northwest currently has a consensus price target of $22.75, suggesting a potential upside of 6.16%. Orange County Bancorp has a consensus price target of $35.50, suggesting a potential upside of 39.60%. Given Orange County Bancorp’s stronger consensus rating and higher possible upside, analysts plainly believe Orange County Bancorp is more favorable than First Financial Northwest.

Risk & Volatility

First Financial Northwest has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Orange County Bancorp has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500.

Dividends

First Financial Northwest pays an annual dividend of $0.26 per share and has a dividend yield of 1.2%. Orange County Bancorp pays an annual dividend of $0.50 per share and has a dividend yield of 2.0%. First Financial Northwest pays out 236.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Orange County Bancorp pays out 20.2% of its earnings in the form of a dividend. Orange County Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares First Financial Northwest and Orange County Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
First Financial Northwest	1.34%	0.67%	0.07%
Orange County Bancorp	19.47%	15.51%	1.12%

Earnings and Valuation

This table compares First Financial Northwest and Orange County Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
First Financial Northwest	$37.56 million	5.27	$1.07 million	$0.11	194.82
Orange County Bancorp	$128.82 million	2.24	$27.88 million	$2.47	10.30

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

Summary

Orange County Bancorp beats First Financial Northwest on 12 of the 16 factors compared between the two stocks.

About First Financial Northwest

First Financial Northwest, Inc. operates as the bank holding company for First Financial Northwest Bank that provides commercial banking services in Washington. The company offers a range of deposit products, including noninterest-bearing accounts, interest-bearing demand accounts, money market accounts, savings accounts, and certificates of deposit. Its loan products comprise one-to-four family residential loans; multifamily and commercial real estate loans; construction/land loans; business loans; and consumer loans, such as home equity loans, lines of credit, second mortgage term loans, auto loans, and savings account loans. The company also provides wealth management services; and online banking services, as well as debit cards and ATMs. The company was founded in 1923 and is headquartered in Renton, Washington.

About Orange County Bancorp

Orange County Bancorp, Inc., through its subsidiaries, provides commercial and consumer banking products and services, and trust and wealth management services to small businesses, middle-market enterprises, local municipal governments, and individuals. It accepts various deposits, including interest-bearing and noninterest-bearing demand accounts, money market deposit accounts, savings accounts, and certificates of deposit. The company also offers commercial real estate loans, commercial and industrial loans, commercial real estate construction loans, residential real estate loans, home equity loans, and consumer loans. In addition, it provides traditional trust and administration, asset management, financial planning, and wealth management services. The company operates full-service branches and loan production office in Orange, Westchester, Rockland, and Bronx counties in New York. Orange County Bancorp, Inc. was founded in 1892 and is headquartered in Middletown, New York.