Capitol Federal Financial (NASDAQ: CFFN) and Provident Financial Services (NYSE:PFS) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.
This table compares Capitol Federal Financial and Provident Financial Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Capitol Federal Financial||28.17%||6.59%||0.98%|
|Provident Financial Services||25.30%||7.89%||1.06%|
Volatility and Risk
Capitol Federal Financial has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500. Comparatively, Provident Financial Services has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.
Valuation and Earnings
This table compares Capitol Federal Financial and Provident Financial Services’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Capitol Federal Financial||$335.38 million||5.34||$84.13 million||N/A||N/A|
|Provident Financial Services||$379.54 million||4.73||$93.94 million||$1.52||17.61|
Provident Financial Services has higher revenue and earnings than Capitol Federal Financial.
This is a breakdown of recent ratings and recommmendations for Capitol Federal Financial and Provident Financial Services, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Capitol Federal Financial||0||2||0||0||2.00|
|Provident Financial Services||0||4||2||0||2.33|
Capitol Federal Financial currently has a consensus target price of $13.75, suggesting a potential upside of 6.18%. Provident Financial Services has a consensus target price of $28.10, suggesting a potential upside of 4.97%. Given Capitol Federal Financial’s higher possible upside, analysts clearly believe Capitol Federal Financial is more favorable than Provident Financial Services.
Insider & Institutional Ownership
74.5% of Capitol Federal Financial shares are owned by institutional investors. Comparatively, 66.5% of Provident Financial Services shares are owned by institutional investors. 2.2% of Capitol Federal Financial shares are owned by company insiders. Comparatively, 3.0% of Provident Financial Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 2.6%. Provident Financial Services pays an annual dividend of $0.80 per share and has a dividend yield of 3.0%. Provident Financial Services pays out 52.6% of its earnings in the form of a dividend. Provident Financial Services has increased its dividend for 7 consecutive years. Provident Financial Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Provident Financial Services beats Capitol Federal Financial on 10 of the 16 factors compared between the two stocks.
Capitol Federal Financial Company Profile
Capitol Federal Financial, Inc. operates as the holding company for Capitol Federal Savings Bank that provides various retail banking products and services in the United States. The company accepts a range of deposit products comprising savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposits. It also provides various loan products, such as one- to four-family residential real estate loans; construction-to-permanent loans; consumer loans comprising home equity loans and lines of credit, home improvement loans, auto loans, and loans secured by savings deposits; and commercial real estate loans consisting of various property types, including hotels, office and retail buildings, senior housing facilities, and multi-family dwellings located in Texas, Missouri, Kansas, Nebraska, Colorado, Arkansas, California, and Montana. In addition, the company offers mobile, telephone, and online banking services, as well as bill payment services; operates a call center; and invests in various securities. It operates a network of 47 branches, which include 37 traditional branches and 10 in-store branches located in 9 counties throughout Kansas and 3 counties in Missouri. The company was founded in 1893 and is headquartered in Topeka, Kansas.
Provident Financial Services Company Profile
Provident Financial Services, Inc. operates as the holding company for Provident Bank that provides various banking services to individuals, families, and businesses in the United States. Its deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA and KEOGH accounts. The company's loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, and retail and industrial properties; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, and marine loans. It also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, the company provides trust and estate administrative services; and asset management services comprising investment management, asset allocation, trust and fiduciary, financial and tax planning, family office, estate settlement, and custody services to individuals, municipalities, non-profits, corporations, and pension funds. Further, it sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure, as well as offers investment advisory services. As of December 31, 2017, the company operated 84 full-service branch offices in northern and central New Jersey, as well as in Pennsylvania. Provident Financial Services, Inc. was founded in 1839 and is headquartered in Jersey City, New Jersey.
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