Analyzing Capitol Federal Financial (NASDAQ:CFFN) and Timberland Bancorp (NASDAQ:TSBK)

Capitol Federal Financial (NASDAQ:CFFN) and Timberland Bancorp (NASDAQ:TSBK) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, earnings, profitability, valuation and institutional ownership.

Profitability

This table compares Capitol Federal Financial and Timberland Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capitol Federal Financial	16.98%	6.99%	0.75%
Timberland Bancorp	26.17%	11.73%	1.54%

Volatility & Risk

Capitol Federal Financial has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Timberland Bancorp has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500.

Valuation and Earnings

This table compares Capitol Federal Financial and Timberland Bancorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capitol Federal Financial	$207.94 million	4.58	$68.03 million	$0.56	13.09
Timberland Bancorp	$80.43 million	4.07	$29.16 million	$3.86	10.75

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.

Institutional and Insider Ownership

88.5% of Capitol Federal Financial shares are owned by institutional investors. Comparatively, 65.5% of Timberland Bancorp shares are owned by institutional investors. 2.8% of Capitol Federal Financial shares are owned by insiders. Comparatively, 3.6% of Timberland Bancorp shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Capitol Federal Financial and Timberland Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capitol Federal Financial	0	4	0	0	2.00
Timberland Bancorp	0	0	1	0	3.00

Capitol Federal Financial currently has a consensus price target of $7.25, suggesting a potential downside of 1.09%. Given Capitol Federal Financial’s higher possible upside, research analysts clearly believe Capitol Federal Financial is more favorable than Timberland Bancorp.

Dividends

Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 4.6%. Timberland Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.8%. Capitol Federal Financial pays out 60.7% of its earnings in the form of a dividend. Timberland Bancorp pays out 30.1% 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. Timberland Bancorp has increased its dividend for 13 consecutive years.

Summary

Timberland Bancorp beats Capitol Federal Financial on 9 of the 17 factors compared between the two stocks.

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.

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.