QCR (NASDAQ:QCRH) and Sound Financial Bancorp (NASDAQ:SFBC) Financial Survey

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

Analyst Recommendations

This is a breakdown of current recommendations for Sound Financial Bancorp and QCR, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sound Financial Bancorp	0	0	1	0	3.00
QCR	0	3	4	0	2.57

QCR has a consensus price target of $108.40, indicating a potential upside of 9.42%. Given QCR’s higher possible upside, analysts clearly believe QCR is more favorable than Sound Financial Bancorp.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sound Financial Bancorp	12.89%	7.31%	0.74%
QCR	22.86%	12.87%	1.50%

Insider & Institutional Ownership

68.8% of Sound Financial Bancorp shares are owned by institutional investors. Comparatively, 70.0% of QCR shares are owned by institutional investors. 12.3% of Sound Financial Bancorp shares are owned by insiders. Comparatively, 3.2% of QCR shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Sound Financial Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 1.8%. QCR pays an annual dividend of $0.60 per share and has a dividend yield of 0.6%. Sound Financial Bancorp pays out 26.9% of its earnings in the form of a dividend. QCR pays out 7.1% 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. Sound Financial Bancorp has increased its dividend for 2 consecutive years. Sound Financial Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Sound Financial Bancorp and QCR”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sound Financial Bancorp	$61.52 million	1.93	$7.16 million	$3.12	14.80
QCR	$603.75 million	2.69	$127.19 million	$8.46	11.71

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

Volatility and Risk

Sound Financial Bancorp has a beta of 0.01, indicating that its stock price is 99% less volatile than the S&P 500. Comparatively, QCR has a beta of 0.73, indicating that its stock price is 27% less volatile than the S&P 500.

Summary

QCR beats Sound Financial Bancorp on 12 of the 17 factors compared between the two stocks.

About Sound Financial Bancorp

Sound Financial Bancorp, Inc. operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses. It accepts various deposits products comprising savings, money market deposit, NOW, and demand accounts, as well as certificates of deposit. The company also offers loans secured by first and second mortgages on one-to four-family residences; home equity loans, including fixed-rate loans and variable-rate lines of credit; commercial and multifamily real estate loans; construction loans secured by single-family residences, and commercial and multifamily real estate; land loans; commercial business loans to finance commercial vehicles and equipment, as well as loans secured by accounts receivable and/or inventory; and secured and unsecured consumer loans, such as new and used manufactured homes, floating homes, automobiles, boats, and recreational vehicle loans, and loans secured by deposit accounts. The company was founded in 1953 and is headquartered in Seattle, Washington.

About QCR

QCR Holdings, Inc., a multi-bank holding company, provides commercial and consumer banking, and trust and asset management services. The company’s deposit products include noninterest-bearing demand, interest-bearing demand, time, and brokered deposits. It also provides various commercial and retail lending/leasing, and investment services to corporations, partnerships, individuals, and government agencies. The company’s loan portfolio comprises loans to small and mid-sized businesses; business loans, including lines of credit for working capital and operational purposes; term loans for the acquisition of facilities, equipment, and other purposes; commercial and residential real estate loans; and installment and other consumer loans, such as home improvement, home equity, motor vehicle, and signature loans, as well as small personal credit lines. In addition, it engages in leasing of machinery and equipment to commercial and industrial businesses under direct financing lease contracts; and issuance of trust preferred securities. QCR Holdings, Inc. was incorporated in 1993 and is headquartered in Moline, Illinois.