Hometrust Bancshares (HTBI) & TFS Financial (TFSL) Critical Contrast

Hometrust Bancshares (NASDAQ: HTBI) and TFS Financial (NASDAQ:TFSL) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Dividends

TFS Financial pays an annual dividend of $0.68 per share and has a dividend yield of 4.2%. Hometrust Bancshares does not pay a dividend. TFS Financial pays out 212.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent recommendations for Hometrust Bancshares and TFS Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hometrust Bancshares 0 2 0 0 2.00
TFS Financial 0 1 0 0 2.00

Hometrust Bancshares currently has a consensus target price of $27.50, suggesting a potential downside of 5.66%. TFS Financial has a consensus target price of $18.50, suggesting a potential upside of 15.12%. Given TFS Financial’s higher possible upside, analysts plainly believe TFS Financial is more favorable than Hometrust Bancshares.

Profitability

This table compares Hometrust Bancshares and TFS Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hometrust Bancshares 4.40% 5.97% 0.74%
TFS Financial 19.87% 5.49% 0.68%

Volatility and Risk

Hometrust Bancshares has a beta of 0.24, indicating that its share price is 76% less volatile than the S&P 500. Comparatively, TFS Financial has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500.

Valuation & Earnings

This table compares Hometrust Bancshares and TFS Financial’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hometrust Bancshares $114.88 million 4.83 $11.72 million $0.94 31.01
TFS Financial $428.84 million 10.51 $88.87 million $0.32 50.22

TFS Financial has higher revenue and earnings than Hometrust Bancshares. Hometrust Bancshares is trading at a lower price-to-earnings ratio than TFS Financial, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

60.6% of Hometrust Bancshares shares are owned by institutional investors. Comparatively, 10.5% of TFS Financial shares are owned by institutional investors. 6.3% of Hometrust Bancshares shares are owned by insiders. Comparatively, 1.6% of TFS Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

TFS Financial beats Hometrust Bancshares on 8 of the 14 factors compared between the two stocks.

Hometrust Bancshares Company Profile

HomeTrust Bancshares, Inc. operates as the bank holding company for HomeTrust Bank that provides a range of retail and commercial banking products. Its deposit products consist of savings, money market, and demand accounts, as well as certificates of deposit for individuals, businesses, and nonprofit organizations. The company's loan portfolio comprises retail consumer loans, such as one-to-four-family residential property lending, home equity lines of credit, construction and land/lots, indirect auto finance, and consumer lending; and commercial loans, including commercial real estate lending, construction and development lending, and commercial and industrial loans. It also provides ground and equipment lease financing to fire departments. As of June 30, 2017, the company operated 42 offices in North Carolina, Upstate South Carolina, East Tennessee, and Southwest Virginia. HomeTrust Bancshares, Inc. was founded in 1926 and is headquartered in Asheville, North Carolina.

TFS Financial Company Profile

TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. Its deposit products include savings accounts, checking accounts, certificate of deposit accounts, individual retirement accounts, and other qualified plan accounts. The company also provides residential real estate mortgage loans, residential construction loans, and home equity loans and lines of credit, as well as purchase mortgages and first mortgage refinance loans. In addition, it engages in the net lease transactions of commercial buildings; provision of escrow and settlement services. The company offers its products and services through its main office in Cleveland, Ohio; and 38 full-service branches and 8 loan production offices located throughout the states of Ohio and Florida. The company was founded in 1938 and is headquartered in Cleveland, Ohio. TFS Financial Corporation is a subsidiary of Third Federal Savings and Loan Association of Cleveland, MHC.

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