Kentucky First Federal Bancorp (NASDAQ:KFFB) vs. ServisFirst Bancshares (NYSE:SFBS) Financial Analysis

Kentucky First Federal Bancorp (NASDAQ:KFFB) and ServisFirst Bancshares (NYSE:SFBS) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitability.

Analyst Ratings

This is a summary of current recommendations for Kentucky First Federal Bancorp and ServisFirst Bancshares, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kentucky First Federal Bancorp	0	1	0	0	2.00
ServisFirst Bancshares	0	1	2	2	3.20

ServisFirst Bancshares has a consensus target price of $93.67, suggesting a potential upside of 15.90%. Given ServisFirst Bancshares’ stronger consensus rating and higher possible upside, analysts clearly believe ServisFirst Bancshares is more favorable than Kentucky First Federal Bancorp.

Dividends

Kentucky First Federal Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 8.7%. ServisFirst Bancshares pays an annual dividend of $1.52 per share and has a dividend yield of 1.9%. Kentucky First Federal Bancorp pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ServisFirst Bancshares pays out 30.0% of its earnings in the form of a dividend. ServisFirst Bancshares has raised its dividend for 10 consecutive years.

Profitability

This table compares Kentucky First Federal Bancorp and ServisFirst Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kentucky First Federal Bancorp	4.04%	1.71%	0.22%
ServisFirst Bancshares	26.95%	16.36%	1.61%

Valuation & Earnings

This table compares Kentucky First Federal Bancorp and ServisFirst Bancshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kentucky First Federal Bancorp	$10.12 million	3.67	$180,000.00	$0.10	45.90
ServisFirst Bancshares	$1.02 billion	4.34	$276.60 million	$5.06	15.97

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

Institutional and Insider Ownership

3.2% of Kentucky First Federal Bancorp shares are owned by institutional investors. Comparatively, 67.3% of ServisFirst Bancshares shares are owned by institutional investors. 3.9% of Kentucky First Federal Bancorp shares are owned by company insiders. Comparatively, 6.7% of ServisFirst Bancshares shares are owned 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.

Volatility and Risk

Kentucky First Federal Bancorp has a beta of 0.12, suggesting that its stock price is 88% less volatile than the S&P 500. Comparatively, ServisFirst Bancshares has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Summary

ServisFirst Bancshares beats Kentucky First Federal Bancorp on 16 of the 18 factors compared between the two stocks.

About Kentucky First Federal Bancorp

Kentucky First Federal Bancorp operates as the holding company for First Federal Savings and Loan Association of Hazard, and Frankfort First Bancorp, Inc. that provide various banking products and services in Kentucky. It accepts deposit products include passbook savings and certificate accounts, checking accounts, and individual retirement accounts. The company's loan portfolio comprises one-to four-family residential mortgage loans; construction loans; mortgage loans secured by multi-family property; nonresidential loans that are secured by commercial office buildings, churches, and properties used for other purposes; commercial non-mortgage loans; and consumer loans, such as home equity lines of credit, loans secured by savings deposits, automobile loans, and unsecured or personal loans. It also invests in mortgage-backed securities. The company was incorporated in 2005 and is based in Hazard, Kentucky. Kentucky First Federal Bancorp is a subsidiary of First Federal MHC.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.