Critical Contrast: Flagstar Financial (NYSE:FLG) & Berkshire Hills Bancorp (NYSE:BHLB)

Flagstar Financial (NYSE:FLG) and Berkshire Hills Bancorp (NYSE:BHLB) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, institutional ownership, risk and dividends.

Volatility and Risk

Flagstar Financial has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Berkshire Hills Bancorp has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Earnings and Valuation

This table compares Flagstar Financial and Berkshire Hills Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flagstar Financial	$2.93 billion	1.30	-$79.00 million	($4.36)	-2.09
Berkshire Hills Bancorp	$353.81 million	3.38	$69.60 million	$0.95	29.33

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Flagstar Financial	-18.40%	-11.35%	-0.78%
Berkshire Hills Bancorp	5.86%	8.68%	0.74%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Flagstar Financial and Berkshire Hills Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flagstar Financial	0	3	0	0	2.00
Berkshire Hills Bancorp	0	3	1	2	2.83

Flagstar Financial currently has a consensus target price of $11.50, indicating a potential upside of 25.96%. Berkshire Hills Bancorp has a consensus target price of $29.70, indicating a potential upside of 6.60%. Given Flagstar Financial’s higher probable upside, analysts plainly believe Flagstar Financial is more favorable than Berkshire Hills Bancorp.

Insider and Institutional Ownership

67.9% of Flagstar Financial shares are owned by institutional investors. Comparatively, 83.1% of Berkshire Hills Bancorp shares are owned by institutional investors. 6.4% of Flagstar Financial shares are owned by insiders. Comparatively, 1.0% of Berkshire Hills Bancorp shares are owned 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.

Dividends

Flagstar Financial pays an annual dividend of $0.04 per share and has a dividend yield of 0.4%. Berkshire Hills Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 2.6%. Flagstar Financial pays out -0.9% of its earnings in the form of a dividend. Berkshire Hills Bancorp pays out 75.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Berkshire Hills Bancorp beats Flagstar Financial on 12 of the 17 factors compared between the two stocks.

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.

About Berkshire Hills Bancorp

Berkshire Hills Bancorp, Inc. operates as the bank holding company for Berkshire Bank that provides various banking products and services in the United States. The company provides various deposit accounts, including demand deposit, interest-bearing checking, regular savings, money market savings, time certificates of deposit, and retirement deposit accounts. It offers loans, such as commercial real estate, commercial and industrial, residential mortgage, and consumer loans. In addition, the company provides wealth management services comprising investment management, trust administration, tax return preparation, and financial planning; and investment products and brokerage services. Further, it offers commercial cash management, online banking and mobile banking, small business banking, and asset based lending services; and debit cards and other electronic fee producing payment services to transaction account customers. It serves its products to personal, commercial, non-profit, and municipal deposit customers. Berkshire Hills Bancorp, Inc. was founded in 1846 and is headquartered in Boston, Massachusetts.