Critical Review: Flagstar Financial (NYSE:FLG) & Hingham Institution for Savings (NASDAQ:HIFS)

Hingham Institution for Savings (NASDAQ:HIFS) and Flagstar Financial (NYSE:FLG) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Hingham Institution for Savings and Flagstar Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hingham Institution for Savings	12.97%	2.95%	0.27%
Flagstar Financial	-17.16%	-10.72%	-0.76%

Dividends

Hingham Institution for Savings pays an annual dividend of $2.52 per share and has a dividend yield of 0.9%. Flagstar Financial pays an annual dividend of $0.04 per share and has a dividend yield of 0.3%. Hingham Institution for Savings pays out 19.6% of its earnings in the form of a dividend. Flagstar Financial pays out -1.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Hingham Institution for Savings and Flagstar Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hingham Institution for Savings	0	0	0	0	0.00
Flagstar Financial	0	3	2	0	2.40

Flagstar Financial has a consensus price target of $12.90, suggesting a potential upside of 0.08%. Given Flagstar Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Flagstar Financial is more favorable than Hingham Institution for Savings.

Institutional and Insider Ownership

49.3% of Hingham Institution for Savings shares are owned by institutional investors. Comparatively, 67.9% of Flagstar Financial shares are owned by institutional investors. 6.4% of Flagstar Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Hingham Institution for Savings and Flagstar Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hingham Institution for Savings	$217.38 million	2.68	$28.19 million	$12.83	21.09
Flagstar Financial	$6.35 billion	0.84	-$1.09 billion	($3.69)	-3.49

Hingham Institution for Savings has higher earnings, but lower revenue than Flagstar Financial. Flagstar Financial is trading at a lower price-to-earnings ratio than Hingham Institution for Savings, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Hingham Institution for Savings has a beta of 1.02, meaning that its share price is 2% more volatile than the S&P 500. Comparatively, Flagstar Financial has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

About Hingham Institution for Savings

Hingham Institution for Savings provides various financial products and services to individuals and small businesses in the United States. It offers savings, checking, money market, demand, and negotiable order of withdrawal accounts, as well as certificates of deposit. The company provides commercial and residential real estate, construction, home equity, commercial, consumer, and mortgage loans. In addition, it offers ATMs, debit cards, and Internet-based banking services. The company offers its services through a network of offices in Boston; Washington, D.C.; and San Francisco Bay Area. Hingham Institution for Savings was incorporated in 1834 and is headquartered in Hingham, Massachusetts.

About Flagstar Financial

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.