Head to Head Review: BofI (BOFI) and Capitol Federal Financial (CFFN)

Capitol Federal Financial (NASDAQ: CFFN) and BofI (NASDAQ:BOFI) are both finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Earnings and Valuation

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This table compares Capitol Federal Financial and BofI’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Capitol Federal Financial $335.38 million 5.09 $84.13 million $0.63 19.60
BofI $455.42 million 5.52 $134.74 million $2.05 19.63

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

Dividends

Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 2.8%. BofI does not pay a dividend. Capitol Federal Financial pays out 54.0% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Capitol Federal Financial 27.99% 6.44% 0.96%
BofI 28.37% 17.27% 1.67%

Risk & Volatility

Capitol Federal Financial has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500. Comparatively, BofI has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Capitol Federal Financial and BofI, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capitol Federal Financial 0 2 0 0 2.00
BofI 0 1 6 0 2.86

Capitol Federal Financial presently has a consensus price target of $13.75, suggesting a potential upside of 11.34%. BofI has a consensus price target of $39.29, suggesting a potential downside of 2.37%. Given Capitol Federal Financial’s higher probable upside, equities analysts plainly believe Capitol Federal Financial is more favorable than BofI.

Insider and Institutional Ownership

75.4% of Capitol Federal Financial shares are owned by institutional investors. Comparatively, 85.0% of BofI shares are owned by institutional investors. 2.2% of Capitol Federal Financial shares are owned by company insiders. Comparatively, 6.2% of BofI shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

BofI beats Capitol Federal Financial on 12 of the 16 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 comprising savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposits. It also provides various loan products, such as one- to four-family residential real estate loans; construction-to-permanent loans; consumer loans comprising home equity loans and lines of credit, home improvement loans, auto loans, and loans secured by savings deposits; and commercial real estate loans consisting of various property types, including hotels, office and retail buildings, senior housing facilities, and multi-family dwellings located in Texas, Missouri, Kansas, Nebraska, Colorado, Arkansas, California, and Montana. In addition, the company offers mobile, telephone, and online banking services, as well as bill payment services; operates a call center; and invests in various securities. It operates a network of 47 branches, which include 37 traditional branches and 10 in-store branches located in 9 counties throughout Kansas and 3 counties in Missouri. The company was founded in 1893 and is headquartered in Topeka, Kansas.

About BofI

BofI Holding, Inc. operates as the holding company for BofI Federal Bank that provides consumer and business banking products in the United States. The company offers deposits products, including consumer and business checking, demand, savings, and time deposit accounts. It also provides single family and multifamily mortgage secured lending products; commercial real estate secured and commercial lending products; specialty finance factoring products; and consumer lending products consisting of prime loans to purchase new and used automobiles and recreational vehicles, as well as deposit-related overdraft lines of credit. In addition, the company offers prepaid card and refund transfer, debit card or ATM card, portfolio management, online bill payment, money transfer, overdraft protection, mobile banking, and text message banking services. BofI Holding, Inc. was incorporated in 1999 and is based in San Diego, California.

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