Head to Head Analysis: Capitol Federal Financial (NASDAQ:CFFN) versus Sturgis Bancorp (OTCMKTS:STBI)

Capitol Federal Financial (NASDAQ:CFFN) and Sturgis Bancorp (OTCMKTS:STBI) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Capitol Federal Financial and Sturgis Bancorp, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capitol Federal Financial	0	3	0	0	2.00
Sturgis Bancorp	0	0	0	0	0.00

Capitol Federal Financial currently has a consensus price target of $7.00, suggesting a potential upside of 4.48%. Given Capitol Federal Financial’s stronger consensus rating and higher possible upside, research analysts plainly believe Capitol Federal Financial is more favorable than Sturgis Bancorp.

Profitability

This table compares Capitol Federal Financial and Sturgis Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capitol Federal Financial	16.19%	6.54%	0.70%
Sturgis Bancorp	12.73%	N/A	N/A

Institutional & Insider Ownership

88.5% of Capitol Federal Financial shares are held by institutional investors. 2.8% of Capitol Federal Financial shares are held by insiders. Comparatively, 16.0% of Sturgis Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Capitol Federal Financial and Sturgis Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capitol Federal Financial	$198.19 million	4.44	$68.03 million	$0.52	12.88
Sturgis Bancorp	$56.82 million	0.82	$2.84 million	$3.43	6.25

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

Volatility and Risk

Capitol Federal Financial has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Sturgis Bancorp has a beta of 0.13, indicating that its stock price is 87% less volatile than the S&P 500.

Dividends

Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 5.1%. Sturgis Bancorp pays an annual dividend of $0.68 per share and has a dividend yield of 3.2%. Capitol Federal Financial pays out 65.4% of its earnings in the form of a dividend. Sturgis Bancorp pays out 19.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Capitol Federal Financial beats Sturgis Bancorp on 12 of the 15 factors compared between the two stocks.

About Capitol Federal Financial

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, including savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposit. It also provides various loan products, such as one- to four-family residential real estate loans, commercial real estate, commercial and industrial, construction loans, and small business loans, as well as consumer loans, which include home equity loans and lines of credit, home improvement loans, vehicle loans, and loans secured by savings deposits. In addition, the company offers mobile, telephone, and online banking services, as well as bill payment services; credit cards; mortgage loan; operates a call center; and invests in various securities. The company serves the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia, and Salina, Kansas, and a portion of the metropolitan area of greater Kansas City. Capitol Federal Financial, Inc. was founded in 1893 and is headquartered in Topeka, Kansas.

About Sturgis Bancorp

Sturgis Bancorp, Inc. operates as the bank holding company for Sturgis Bank & Trust Company that provides banking products and services in Michigan, the United States. The company offers checking, savings and health savings, and money market accounts; and certificates of deposit and individual retirement accounts. It also provides mortgage, automobile, savings secured, personal, home equity, equipment and machinery, government supported, and commercial real estate loans, as well as home equity lines of credit and business lines of credit; and credit cards. In addition, the company offers private banking, cashier checks, wire transfers, foreign drafts and foreign currency, overdraft protection, night depository, and notary services, as well as safe deposit boxes and residential mortgages. Further, it provides direct deposit, remote deposit capture, Visa check card, and checks reorder services; and investment and financial-advisory services, as well as commercial and consumer insurance and title insurance products. Additionally, the company offers estate and asset management services, such as estate settlements, trust administration, record keeping, investment management, and custody services; cash and treasury management; and online and mobile banking, bill pay, and mobile wallet services. It operates through 14 bank facilities and 4 full service standalone ATMs located in 12 communities in Michigan. Sturgis Bancorp, Inc. was founded in 1905 and is headquartered in Sturgis, Michigan.