Critical Analysis: Kentucky First Federal Bancorp (NASDAQ:KFFB) & Northpointe Bancshares (NYSE:NPB)

Kentucky First Federal Bancorp (NASDAQ:KFFB) and Northpointe Bancshares (NYSE:NPB) are both small-cap finance companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Kentucky First Federal Bancorp and Northpointe Bancshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kentucky First Federal Bancorp	0	1	0	0	2.00
Northpointe Bancshares	1	2	1	0	2.00

Northpointe Bancshares has a consensus target price of $19.83, suggesting a potential upside of 11.27%. Given Northpointe Bancshares’ higher possible upside, analysts plainly believe Northpointe Bancshares is more favorable than Kentucky First Federal Bancorp.

Insider & Institutional Ownership

3.2% of Kentucky First Federal Bancorp shares are owned by institutional investors. 3.9% of Kentucky First Federal Bancorp shares are owned by insiders. Comparatively, 18.3% of Northpointe Bancshares shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Kentucky First Federal Bancorp and Northpointe Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kentucky First Federal Bancorp	6.67%	2.87%	0.38%
Northpointe Bancshares	17.92%	14.80%	1.28%

Valuation & Earnings

This table compares Kentucky First Federal Bancorp and Northpointe Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kentucky First Federal Bancorp	$19.74 million	2.09	$180,000.00	$0.17	30.00
Northpointe Bancshares	$471.18 million	1.31	$83.41 million	$2.22	8.03

Northpointe Bancshares has higher revenue and earnings than Kentucky First Federal Bancorp. Northpointe Bancshares is trading at a lower price-to-earnings ratio than Kentucky First Federal Bancorp, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Kentucky First Federal Bancorp has a beta of 0.16, suggesting that its stock price is 84% less volatile than the S&P 500. Comparatively, Northpointe Bancshares has a beta of 0.12, suggesting that its stock price is 88% less volatile than the S&P 500.

Summary

Northpointe Bancshares beats Kentucky First Federal Bancorp on 9 of the 13 factors compared between the two stocks.

About Kentucky First Federal Bancorp

Kentucky First Federal Bancorp operates as the holding company for First Federal Savings and Loan Association of Hazard, and Frankfort First Bancorp, Inc. that provide various banking products and services in Kentucky. It accepts deposit products include passbook savings and certificate accounts, checking accounts, and individual retirement accounts. The company's loan portfolio comprises one-to four-family residential mortgage loans; construction loans; mortgage loans secured by multi-family property; nonresidential loans that are secured by commercial office buildings, churches, and properties used for other purposes; commercial non-mortgage loans; and consumer loans, such as home equity lines of credit, loans secured by savings deposits, automobile loans, and unsecured or personal loans. It also invests in mortgage-backed securities. The company was incorporated in 2005 and is based in Hazard, Kentucky. Kentucky First Federal Bancorp is a subsidiary of First Federal MHC.

About Northpointe Bancshares

Northpointe Bancshares, Inc. operates as a bank holding company. It offers a nationwide mortgage purchase program, residential mortgage loans, digital deposit banking to retail customers and custodial deposit services. The company was founded by Charles A. Williams in 1998 and is headquartered in Grand Rapids, MI.