Over the past six months, Brookline Bancorp’s stock price fell to $10.31. Shareholders have lost 13.8% of their capital, disappointing when considering the S&P 500 was flat. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation.
Is now the time to buy Brookline Bancorp, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Brookline Bancorp Not Exciting?
Even though the stock has become cheaper, we're sitting this one out for now. Here are three reasons why BRKL doesn't excite us and a stock we'd rather own.
1. Net Interest Income Points to Soft Demand
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone - its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
Brookline Bancorp’s net interest income has grown at a 5.7% annualized rate over the last four years, worse than the broader bank industry. This was driven by its loan growth as its net interest margin, which represents how much a bank earns in relation to its outstanding loan book, declined throughout that period.
2. Net Interest Margin Dropping
Revenue is a fine reference point for banks, but net interest income and margin are better indicators of business quality for banks because they’re balance sheet-driven businesses that leverage their assets to generate profits.
Over the past two years, Brookline Bancorp’s net interest margin averaged 3.1%. Its margin also contracted by 47.7 basis points (100 basis points = 1 percentage point) over that period.
This decline was a headwind for its net interest income. While prevailing rates are a major determinant of net interest margin changes over time, the decline could mean Brookline Bancorp either faced competition for loans and deposits or experienced a negative mix shift in its balance sheet composition.
3. EPS Took a Dip Over the Last Two Years
While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.
Sadly for Brookline Bancorp, its EPS declined by 20.9% annually over the last two years while its revenue grew by 1%. This tells us the company became less profitable on a per-share basis as it expanded.
Final Judgment
Brookline Bancorp isn’t a terrible business, but it doesn’t pass our bar. After the recent drawdown, the stock trades at 0.5× forward P/B (or $10.31 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're pretty confident there are more exciting stocks to buy at the moment. We’d suggest looking at the Amazon and PayPal of Latin America.
Stocks We Like More Than Brookline Bancorp
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
