Timberland Bancorp (NASDAQ:TSBK – Get Free Report) and Capitol Federal Financial (NASDAQ:CFFN – Get Free Report) are both small-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.
Risk & Volatility
Timberland Bancorp has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500. Comparatively, Capitol Federal Financial has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.
Institutional & Insider Ownership
65.5% of Timberland Bancorp shares are held by institutional investors. Comparatively, 88.5% of Capitol Federal Financial shares are held by institutional investors. 3.6% of Timberland Bancorp shares are held by company insiders. Comparatively, 2.8% of Capitol Federal Financial shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Timberland Bancorp | 0 | 0 | 1 | 0 | 3.00 |
| Capitol Federal Financial | 0 | 4 | 0 | 0 | 2.00 |
Capitol Federal Financial has a consensus price target of $7.25, indicating a potential upside of 2.33%. Given Capitol Federal Financial’s higher possible upside, analysts clearly believe Capitol Federal Financial is more favorable than Timberland Bancorp.
Profitability
This table compares Timberland Bancorp and Capitol Federal Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Timberland Bancorp | 26.17% | 11.73% | 1.54% |
| Capitol Federal Financial | 16.98% | 6.99% | 0.75% |
Valuation & Earnings
This table compares Timberland Bancorp and Capitol Federal Financial”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Timberland Bancorp | $114.63 million | 2.72 | $29.16 million | $3.86 | 10.26 |
| Capitol Federal Financial | $420.24 million | 2.19 | $68.03 million | $0.56 | 12.65 |
Capitol Federal Financial has higher revenue and earnings than Timberland Bancorp. Timberland 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.
Dividends
Timberland Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.9%. Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 4.8%. Timberland Bancorp pays out 30.1% of its earnings in the form of a dividend. Capitol Federal Financial pays out 60.7% 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. Timberland Bancorp has raised its dividend for 13 consecutive years.
Summary
Timberland Bancorp beats Capitol Federal Financial on 10 of the 17 factors compared between the two stocks.
About Timberland Bancorp
Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.
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.
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