Contrasting Suruga Bank (OTCMKTS:SUGBY) and Broadway Financial (NASDAQ:BYFC)

Suruga Bank (OTCMKTS:SUGBY) and Broadway Financial (NASDAQ:BYFC) are both small-cap finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.

Risk & Volatility

Suruga Bank has a beta of -0.05, meaning that its share price is 105% less volatile than the S&P 500. Comparatively, Broadway Financial has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Insider and Institutional Ownership

12.1% of Broadway Financial shares are owned by institutional investors. 3.0% of Broadway Financial shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Suruga Bank and Broadway Financial”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Suruga Bank	$730.15 million	1.89	$229.16 million	$13.12	6.10
Broadway Financial	$63.03 million	1.42	-$24.80 million	($2.75)	-3.51

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Suruga Bank and Broadway Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Suruga Bank	0	0	0	0	0.00
Broadway Financial	1	0	0	0	1.00

Profitability

This table compares Suruga Bank and Broadway Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Suruga Bank	33.98%	11.18%	0.99%
Broadway Financial	-31.80%	3.01%	0.27%

Summary

Suruga Bank beats Broadway Financial on 8 of the 12 factors compared between the two stocks.

About Suruga Bank

Suruga Bank Ltd. provides various banking and financial products and services to individuals and corporate customers in Japan. The company offers deposit products, such as time, ordinary, savings, foreign currency, and other deposits, as well as current and general accounts; card, housing, second house, startup, and business up term loans, as well as loans by purpose; credit and debit cards; overdrafts; and other financing products. It also provides investment trust, public bond, pension contribution, insurance, inheritance/trust, lottery, foreign currency, pay-easy, web direct, safe deposit box, external linkage, foreign remittance, fund management, e-combination, payment, nursing care/medical care/dispensing compensation receivable factoring, mortgage, and Internet and telephone banking services. In addition, the company offers staffing, money lending, guarantee, printing, leasing, and agency services. The company was incorporated in 1895 and is headquartered in Numazu, Japan.

About Broadway Financial

Broadway Financial Corporation operates as the holding company for City First Bank, National Association that provides various banking products and services in the United States. It accepts various deposit accounts, including savings accounts, checking accounts, interest checking accounts, money market accounts, and fixed-term certificates of deposit. The company also offers mortgage loans, which are secured by multi-family residential properties; single family residential properties; and commercial real estate, including charter schools, community facilities, and churches, as well as commercial business, construction, and consumer loans. In addition, it invests in securities issued by federal government agencies, residential mortgage-backed securities, and other investments. The company was founded in 1946 and is headquartered in Los Angeles, California.