Norwood Financial Corp (NWFL) stock analysis

P/E above its 5-year median

Norwood Financial's P/E of 11.7 is above its own 5-year median of 10.4.

P/E below the industry

Norwood Financial's P/E of 11.7 is below the Commercial Banks median of 12.1.

P/S above the industry

Norwood Financial's price-to-sales of 43.97 is above the Commercial Banks median of 3.60.

P/B above the industry

Norwood Financial's price-to-book of 1.39 is above the Commercial Banks median of 1.29.

Trading above fair value

The share price of $36.17 is above our fair value estimate of $33.18.

Margin of safety under 20%

The price is 9.0% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -3.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -5.6% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 321% over the last twelve months, against a 5-year average of 13.0% a year.

Growing faster than the industry

Revenue grew 14.6% over the last twelve months; the Commercial Banks median is 11.3%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity under 15%

Return on equity was 12.5% over the last twelve months and averaged 10.0% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 1.2%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

Norwood Financial's return on equity of 12.5% is above the Commercial Banks median of 11.5%.

Earnings grew over 5 years

Net income grew 13.0% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 360% over the last twelve months, against a 5-year average of 254%.

Net margin above the industry

Norwood Financial's net margin of 360% is above the Commercial Banks median of 30.3%.

Well capitalized

Equity is 9.6% of total assets; 8% or more is a comfortable cushion.

Loans funded by deposits

Loans equal 90.4% of deposits, so lending is funded by customer deposits.

Adequate loan-loss reserve

The allowance for credit losses is 1.1% of loans; we look for at least 1%.

Efficient operations

Non-interest expense takes 59.4% of revenue; under 60% is efficient for a bank.

Deposits growing

Deposits grew 21.0% over the past year.

Modest borrowings

Borrowings other than deposits are 19.8% of equity.

Pays a dividend

Norwood Financial paid dividends worth 3.5% of the share price over the last twelve months.

Yield below Treasuries

The 3.5% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Norwood Financial yields 3.5%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 41.4% of net income.

Covered by free cash flow

Dividends take 33.5% of free cash flow.