Contrasting First Financial Northwest (NASDAQ:FFNW) and Red River Bancshares (NASDAQ:RRBI)

Red River Bancshares (NASDAQ:RRBI) and First Financial Northwest (NASDAQ:FFNW) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.

Earnings and Valuation

This table compares Red River Bancshares and First Financial Northwest”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red River Bancshares	$106.72 million	3.52	$34.88 million	$4.75	11.67
First Financial Northwest	$38.37 million	5.13	$6.30 million	$0.11	193.91

Red River Bancshares has higher revenue and earnings than First Financial Northwest. Red River Bancshares 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.

Analyst Ratings

This is a summary of current ratings for Red River Bancshares and First Financial Northwest, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red River Bancshares	0	0	0	0	0.00
First Financial Northwest	0	3	0	0	2.00

First Financial Northwest has a consensus target price of $23.00, indicating a potential upside of 7.83%. Given First Financial Northwest’s stronger consensus rating and higher possible upside, analysts clearly believe First Financial Northwest is more favorable than Red River Bancshares.

Risk and Volatility

Red River Bancshares has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, First Financial Northwest has a beta of 0.52, suggesting that its stock price is 48% less volatile than the S&P 500.

Dividends

Red River Bancshares pays an annual dividend of $0.36 per share and has a dividend yield of 0.6%. First Financial Northwest pays an annual dividend of $0.26 per share and has a dividend yield of 1.2%. Red River Bancshares pays out 7.6% of its earnings in the form of a dividend. 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.

Profitability

This table compares Red River Bancshares and First Financial Northwest’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red River Bancshares	21.42%	10.76%	1.08%
First Financial Northwest	1.31%	0.66%	0.07%

Insider and Institutional Ownership

27.5% of Red River Bancshares shares are owned by institutional investors. Comparatively, 55.0% of First Financial Northwest shares are owned by institutional investors. 16.5% of Red River Bancshares shares are owned by insiders. Comparatively, 7.2% of First Financial Northwest 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.

Summary

Red River Bancshares beats First Financial Northwest on 9 of the 15 factors compared between the two stocks.

About Red River Bancshares

Red River Bancshares, Inc. operates as a bank holding company for Red River Bank that provides banking products and services to commercial and retail customers in Louisiana. The company provides various deposit products, including checking, saving, money market accounts, and time deposits. It offers commercial real estate loans; one-to-four family mortgage loans and home equity lines of credit; construction and development loans; commercial and industrial loans; small business administration paycheck protection program loans; tax-exempt loans; consumer loans to individuals for personal, family, and household purposes, including secured and unsecured installment and term loans; home mortgage loans; and lines of credit and standby letters of credit. In addition, the company provides treasury management, private banking, and brokerage; investment advisory, financial planning, and a suite of retirement plans; debit and credit cards, direct deposits, cashier's checks, and wire transfer services; online banking services, including access to account balances, online transfers, online bill payment, and electronic delivery of customer statements; and banking services in person, through ATMs, drive-through facilities, night deposits, telephone, mail, mobile banking, and remote deposits. Red River Bancshares, Inc. was incorporated in 1998 and is headquartered in Alexandria, Louisiana.

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.