Gouverneur Bancorp (OTCMKTS:GOVB) and Provident Financial (NASDAQ:PROV) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, institutional ownership, analyst recommendations, risk, valuation, dividends and profitability.
Earnings and Valuation
This table compares Gouverneur Bancorp and Provident Financial’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Gouverneur Bancorp||$6.84 million||3.18||$1.19 million||N/A||N/A|
|Provident Financial||$56.89 million||1.70||$4.42 million||$0.58||22.28|
This table compares Gouverneur Bancorp and Provident Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Gouverneur Bancorp pays an annual dividend of $0.34 per share and has a dividend yield of 3.3%. Provident Financial pays an annual dividend of $0.56 per share and has a dividend yield of 4.3%. Provident Financial pays out 96.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Provident Financial has raised its dividend for 8 consecutive years. Provident Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
59.6% of Provident Financial shares are owned by institutional investors. 9.7% of Gouverneur Bancorp shares are owned by insiders. Comparatively, 14.4% of Provident Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Volatility & Risk
Gouverneur Bancorp has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Provident Financial has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.
This is a breakdown of recent ratings for Gouverneur Bancorp and Provident Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Provident Financial has a consensus price target of $23.75, suggesting a potential upside of 83.82%. Given Provident Financial’s higher possible upside, analysts clearly believe Provident Financial is more favorable than Gouverneur Bancorp.
Provident Financial beats Gouverneur Bancorp on 12 of the 14 factors compared between the two stocks.
About Gouverneur Bancorp
Gouverneur Bancorp, Inc. operates as the holding company for Gouverneur Savings and Loan Association that provides banking services to individuals and businesses in New York. The company's deposit products include passbook savings accounts, NOW accounts, money market deposit accounts, checking accounts, and certificates of deposit. Its loan portfolio comprises residential mortgage loans, commercial mortgage loans, consumer loans, automobile loans, non-real estate commercial loans; and commercial and non-mortgage loans to local businesses for working capital, machinery and equipment purchases, expansion, and other business purposes. The company also invests in general obligation municipal bonds and debt securities issued by the United States government and its agencies; and mortgage-backed securities issued or guaranteed by government-sponsored enterprises. It serves primarily the southern St. Lawrence County, and northern Jefferson and Lewis counties in New York State through two full-service branch offices. The company was founded in 1892 and is based in Gouverneur, New York. Gouverneur Bancorp, Inc operates as a subsidiary of Cambray Mutual Holding Company.
About Provident Financial
Provident Financial Holdings, Inc. operates as the holding company for Provident Savings Bank, F.S.B. that provides community and mortgage banking services to consumers and small to mid-sized businesses in the Inland Empire region of Southern California. It operates through two segments, Provident Bank and Provident Bank Mortgage. The company's deposit products include checking, savings, and money market accounts, as well as time deposits; and loan portfolio consists of single-family, multi-family, commercial real estate, construction, commercial business, consumer, and other mortgage loans. It also originates, purchases, and sells single-family mortgage loans, including second mortgages and equity lines of credit. In addition, the company offers investment services comprising the sale of investment products, such as annuities and mutual funds; and trustee services for real estate transactions. It operates through 13 full-service banking offices in Riverside County and 1 full-service banking office in San Bernardino County. The company was founded in 1956 and is based in Riverside, California.
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