Flagstar Financial (NYSE:FLG) versus Provident Bancorp (NASDAQ:PVBC) Financial Survey

Provident Bancorp (NASDAQ:PVBC) 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 risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.

Valuation and Earnings

This table compares Provident Bancorp and Flagstar Financial”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Provident Bancorp	$55.40 million	3.65	$10.95 million	$0.43	26.51
Flagstar Financial	$8.20 billion	0.48	-$79.00 million	($4.36)	-2.17

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

Profitability

This table compares Provident Bancorp and Flagstar Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Provident Bancorp	5.53%	2.36%	0.32%
Flagstar Financial	-18.40%	-11.35%	-0.78%

Dividends

Provident Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. Flagstar Financial pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. Provident Bancorp pays out 9.3% of its earnings in the form of a dividend. Flagstar Financial pays out -0.9% 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. Flagstar Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Provident Bancorp has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, Flagstar Financial has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500.

Insider & Institutional Ownership

74.6% of Provident Bancorp shares are held by institutional investors. Comparatively, 67.9% of Flagstar Financial shares are held by institutional investors. 3.9% of Provident Bancorp shares are held by insiders. Comparatively, 6.4% of Flagstar Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and price targets for Provident Bancorp and Flagstar Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Provident Bancorp	0	1	0	0	2.00
Flagstar Financial	0	3	0	0	2.00

Provident Bancorp currently has a consensus target price of $12.00, suggesting a potential upside of 5.26%. Flagstar Financial has a consensus target price of $11.50, suggesting a potential upside of 21.31%. Given Flagstar Financial’s higher probable upside, analysts clearly believe Flagstar Financial is more favorable than Provident Bancorp.

Summary

Provident Bancorp beats Flagstar Financial on 8 of the 14 factors compared between the two stocks.

About Provident Bancorp

Provident Bancorp, Inc. is a Maryland corporation that was formed in 2019 to be the successor corporation to Provident Bancorp, Inc., a Massachusetts corporation, and the holding company for The Provident Bank. The Provident Bank, a subsidiary of Provident Bancorp, Inc. is an innovative, commercial bank that finds solutions for its business and private clients.

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.