Analyzing Security Bancorp (OTCMKTS:SCYT) and TFS Financial (NASDAQ:TFSL)

Security Bancorp (OTCMKTS:SCYT) 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 valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Security Bancorp	24.05%	N/A	N/A
TFS Financial	11.42%	4.89%	0.53%

Risk and Volatility

Security Bancorp has a beta of 0.05, suggesting that its share price is 95% less volatile than the S&P 500. Comparatively, TFS Financial has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500.

Earnings & Valuation

This table compares Security Bancorp and TFS Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Security Bancorp	$24.35 million	1.75	$5.49 million	$15.41	7.27
TFS Financial	$791.96 million	5.81	$90.96 million	$0.33	49.76

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

Analyst Ratings

This is a breakdown of current recommendations for Security Bancorp and TFS Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Security Bancorp	0	0	0	0	0.00
TFS Financial	0	3	1	0	2.25

TFS Financial has a consensus price target of $15.50, indicating a potential downside of 5.60%. Given TFS Financial’s stronger consensus rating and higher probable upside, analysts clearly believe TFS Financial is more favorable than Security Bancorp.

Insider and Institutional Ownership

9.8% of TFS Financial shares are held by institutional investors. 0.7% of TFS Financial shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Security Bancorp pays an annual dividend of $1.00 per share and has a dividend yield of 0.9%. TFS Financial pays an annual dividend of $1.13 per share and has a dividend yield of 6.9%. Security Bancorp pays out 6.5% of its earnings in the form of a dividend. TFS Financial pays out 342.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

TFS Financial beats Security Bancorp on 13 of the 16 factors compared between the two stocks.

About Security Bancorp

Security Bancorp, Inc. operates as the bank holding company for Security Federal Savings Bank that provides banking products and services to individual and corporate customers in Tennessee. The company's deposit products include checking and savings accounts, and certificates of deposit. It also offers consumer loans; mortgage loans; and commercial loans, including installment loans, lines of credit, and real estate lending. In addition, the company provides financial services, as well as online, mobile, and telephone banking services. Security Bancorp, Inc. was founded in 1960 and is headquartered in McMinnville, Tennessee.

About TFS Financial

TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. Its deposit products include savings, money market, checking, individual retirement, and other qualified plan accounts, as well as certificates of deposit. 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 offers escrow and settlement services. The company provides its products and services through its main office in Cleveland, Ohio; and multiple full-service branches and loan production offices located throughout the states of Ohio and Florida. TFS Financial Corporation 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.