Financial Review: S&T Bancorp (NASDAQ:STBA) & Kentucky First Federal Bancorp (NASDAQ:KFFB)

Kentucky First Federal Bancorp (NASDAQ:KFFB) and S&T Bancorp (NASDAQ:STBA) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Earnings and Valuation

This table compares Kentucky First Federal Bancorp and S&T Bancorp”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kentucky First Federal Bancorp	$21.42 million	2.04	$1.91 million	$0.23	23.52
S&T Bancorp	$568.51 million	3.01	$134.23 million	$3.76	12.91

S&T Bancorp has higher revenue and earnings than Kentucky First Federal Bancorp. S&T Bancorp 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 & Insider Ownership

3.2% of Kentucky First Federal Bancorp shares are owned by institutional investors. Comparatively, 65.2% of S&T Bancorp shares are owned by institutional investors. 3.9% of Kentucky First Federal Bancorp shares are owned by company insiders. Comparatively, 1.2% of S&T Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and target prices for Kentucky First Federal Bancorp and S&T Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kentucky First Federal Bancorp	0	1	0	0	2.00
S&T Bancorp	0	6	2	0	2.25

S&T Bancorp has a consensus target price of $51.60, suggesting a potential upside of 6.33%. Given S&T Bancorp’s stronger consensus rating and higher probable upside, analysts plainly believe S&T Bancorp is more favorable than Kentucky First Federal Bancorp.

Dividends

Kentucky First Federal Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 3.7%. S&T Bancorp pays an annual dividend of $1.48 per share and has a dividend yield of 3.0%. Kentucky First Federal Bancorp pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. S&T Bancorp pays out 39.4% of its earnings in the form of a dividend. S&T Bancorp has increased its dividend for 13 consecutive years.

Profitability

This table compares Kentucky First Federal Bancorp and S&T Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kentucky First Federal Bancorp	8.91%	3.86%	0.52%
S&T Bancorp	24.51%	9.74%	1.42%

Risk and Volatility

Kentucky First Federal Bancorp has a beta of 0.14, indicating that its stock price is 86% less volatile than the S&P 500. Comparatively, S&T Bancorp has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Summary

S&T Bancorp beats Kentucky First Federal Bancorp on 14 of the 17 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 S&T Bancorp

S&T Bancorp, Inc. is a bank holding company, which engages in the provision of consumer, commercial, and small business banking services. It operates through the following segments: Commercial Real Estate, Commercial and Industrial, Commercial Construction, Business Banking, Consumer Real Estate, and Other Consumer. The Commercial Real Estate segment includes both owner-occupied properties and investment properties for various purposes such as hotels, retail, multifamily and health care. The Commercial and Industrial segment focuses on the companies or manufacturers for the purpose of production, operating capacity, accounts receivable, inventory or equipment financing. The Commercial Construction segment refers to the finance construction of buildings or other structures, as well as to finance the acquisition and development of raw land for various purposes. The Business Banking segment is made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards. The Consumer Real Estate segment offers first and second liens such as 1-4 family residential mortgages, home equity loans and home equity lines of credit. The Other Consumer segment consists of individuals that may be secured by assets other than 1-4 family residences, as well as unsecured loans. The company was founded on March 17, 1983 and is headquartered in Indiana, PA.