Financial Analysis: National Bankshares (NASDAQ:NKSH) versus Flagstar Bank, National Association (NYSE:FLG)

National Bankshares (NASDAQ:NKSH) and Flagstar Bank, National Association (NYSE:FLG) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of recent recommendations and price targets for National Bankshares and Flagstar Bank, National Association, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
National Bankshares	0	0	1	1	3.50
Flagstar Bank, National Association	1	3	9	0	2.62

Flagstar Bank, National Association has a consensus target price of $16.79, suggesting a potential upside of 24.66%. Given Flagstar Bank, National Association’s higher possible upside, analysts plainly believe Flagstar Bank, National Association is more favorable than National Bankshares.

Insider and Institutional Ownership

29.7% of National Bankshares shares are held by institutional investors. Comparatively, 67.9% of Flagstar Bank, National Association shares are held by institutional investors. 3.3% of National Bankshares shares are held by insiders. Comparatively, 21.4% of Flagstar Bank, National Association shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

National Bankshares has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Flagstar Bank, National Association has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.

Earnings and Valuation

This table compares National Bankshares and Flagstar Bank, National Association”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
National Bankshares	$85.32 million	3.07	$15.83 million	$3.18	12.94
Flagstar Bank, National Association	$4.81 billion	1.16	-$177.00 million	$0.03	449.00

National Bankshares has higher earnings, but lower revenue than Flagstar Bank, National Association. National Bankshares is trading at a lower price-to-earnings ratio than Flagstar Bank, National Association, indicating that it is currently the more affordable of the two stocks.

Dividends

National Bankshares pays an annual dividend of $1.50 per share and has a dividend yield of 3.6%. Flagstar Bank, National Association pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. National Bankshares pays out 47.2% of its earnings in the form of a dividend. Flagstar Bank, National Association pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. National Bankshares is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares National Bankshares and Flagstar Bank, National Association’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
National Bankshares	23.22%	10.66%	1.09%
Flagstar Bank, National Association	1.08%	0.98%	0.08%

Summary

National Bankshares beats Flagstar Bank, National Association on 10 of the 17 factors compared between the two stocks.

About National Bankshares

National Bankshares, Inc. operates as the bank holding company for the National Bank of Blacksburg that provides retail and commercial banking products and services to individuals, businesses, non-profits, and local governments. The company accepts interest-bearing and non-interest-bearing demand deposit accounts, money market deposit accounts, savings accounts, certificates of deposit, health savings accounts, and individual retirement accounts. Its loan products include commercial and agricultural, commercial real estate, residential real estate, home equity, and various consumer loan products, as well as loans for the construction of commercial and residential properties. The company also provides business and consumer debit and credit cards; letters of credit, night depository services, safe deposit boxes, utility payment services, and automatic funds transfer; wealth management, trust, and estate services; non-deposit investment and insurance products; and telephone, mobile, and Internet banking services. The company was founded in 1891 and is headquartered in Blacksburg, Virginia.

About Flagstar Bank, National Association

Flagstar Financial, Inc. operates as the bank holding company for Flagstar Bank, N.A. that provides banking products and services in the United States. The company’s deposit products include interest-bearing checking and money market, savings, non-interest-bearing, and retirement accounts, as well as certificates of deposit. Its loan products comprise multi-family loans; commercial real estate loans; acquisition, development, and construction loans; commercial and industrial loans; one-to-four family loans; specialty finance loans and leases; warehouse loans; and other loans, such as home equity lines of credit, boat and recreational vehicle indirect lending, point of sale consumer loans, and other consumer loans, including overdraft loans. The company offers cash management products; non-deposit investment and insurance products; and online banking, mobile banking, and bank-by-phone services. It primarily serves individuals, small and mid-size businesses, and professional associations. The company was formerly known as New York Community Bancorp, Inc. and changed its name to Flagstar Financial, Inc. in October 2024. Flagstar Financial, Inc. was founded in 1859 and is headquartered in Hicksville, New York.