Pathfinder Bancorp (NASDAQ:PBHC) and Sound Financial Bancorp (NASDAQ:SFBC) Critical Survey

Sound Financial Bancorp (NASDAQ:SFBC) and Pathfinder Bancorp (NASDAQ:PBHC) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Earnings & Valuation

This table compares Sound Financial Bancorp and Pathfinder Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Financial Bancorp	$41.08 million	2.82	$7.16 million	$3.36	13.44
Pathfinder Bancorp	$79.15 million	1.05	-$1.93 million	$0.01	1,694.40

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sound Financial Bancorp	13.88%	7.82%	0.79%
Pathfinder Bancorp	0.13%	0.08%	0.01%

Dividends

Sound Financial Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 1.9%. Pathfinder Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.4%. Sound Financial Bancorp pays out 25.0% of its earnings in the form of a dividend. Pathfinder Bancorp pays out 4,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Sound Financial Bancorp has raised its dividend for 2 consecutive years and Pathfinder Bancorp has raised its dividend for 1 consecutive years.

Institutional & Insider Ownership

68.8% of Sound Financial Bancorp shares are owned by institutional investors. Comparatively, 26.7% of Pathfinder Bancorp shares are owned by institutional investors. 12.3% of Sound Financial Bancorp shares are owned by company insiders. Comparatively, 15.7% of Pathfinder Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Sound Financial Bancorp has a beta of 0.05, suggesting that its share price is 95% less volatile than the S&P 500. Comparatively, Pathfinder Bancorp has a beta of 0.11, suggesting that its share price is 89% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Sound Financial Bancorp and Pathfinder Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Financial Bancorp	0	1	0	0	2.00
Pathfinder Bancorp	0	1	0	0	2.00

Summary

Sound Financial Bancorp beats Pathfinder Bancorp on 9 of the 14 factors compared between the two stocks.

About Sound Financial Bancorp

Sound Financial Bancorp, Inc. is a bank holding company headquartered in Seattle, Washington. Through its principal subsidiary, Sound Community Bank, the company provides banking and financial services to individuals, families, businesses and nonprofit organizations in the Puget Sound region. Sound Community Bank offers deposit products, including checking, savings, money market and certificate accounts, along with residential mortgage, commercial real estate, construction, commercial and industrial, consumer and small-business loans.

About Pathfinder Bancorp

Pathfinder Bancorp, Inc. is a bank holding company headquartered in Oswego, New York. Through its principal subsidiary, Pathfinder Bank, the company provides banking and financial services to individuals, families, businesses and organizations in Central New York. Pathfinder Bank offers deposit accounts, consumer and commercial lending, residential and commercial real estate loans, mortgage products and other traditional banking services. The bank also provides cash management and related financial solutions designed to support small businesses, commercial customers and municipal organizations.