Over the past six months, Columbia Financial has been a great trade, beating the S&P 500 by 19.5%. Its stock price has climbed to $18.42, representing a healthy 25.4% increase. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move.
Is now the time to buy Columbia Financial, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.
Why Do We Think Columbia Financial Will Underperform?
We’re happy investors have made money, but we don't have much confidence in Columbia Financial. Here are three reasons there are better opportunities than CLBK and a stock we'd rather own.
1. Net Interest Income Hits a Plateau
Our experience and research show the market cares primarily about a bank’s net interest income growth as one-time fees are considered a lower-quality and non-recurring revenue source.
Columbia Financial’s net interest income was flat over the last five years, much worse than the broader banking industry. This shows that lending underperformed its other business lines.
2. Low Net Interest Margin Reveals Weak Loan Book Profitability
The net interest margin (NIM) is a key profitability indicator that measures the difference between what a bank earns on its loans and what it pays on its deposits. This metric measures how efficiently one can generate income from its core lending activities.
Over the past two years, we can see that Columbia Financial’s net interest margin averaged a poor 2.1%, indicating the company has weak loan book economics.
3. EPS Trending Down
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Sadly for Columbia Financial, its EPS declined by 1.9% annually over the last five years while its revenue grew by 1.2%. This tells us the company became less profitable on a per-share basis as it expanded.
Final Judgment
Columbia Financial doesn’t pass our quality test. With its shares topping the market in recent months, the stock trades at 1.5× forward P/B (or $18.42 per share). At this valuation, there’s a lot of good news priced in - you can find more timely opportunities elsewhere. We’d suggest looking at a safe-and-steady industrials business benefiting from an upgrade cycle.
Stocks We Would Buy Instead of Columbia Financial
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
