Southern First Bancshares (NASDAQ: SFST) and Washington Federal (NASDAQ:WAFD) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.
Volatility and Risk
Southern First Bancshares has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Washington Federal has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.
Washington Federal pays an annual dividend of $0.72 per share and has a dividend yield of 2.2%. Southern First Bancshares does not pay a dividend. Washington Federal pays out 37.1% of its earnings in the form of a dividend. Washington Federal has raised its dividend for 4 consecutive years.
Earnings and Valuation
This table compares Southern First Bancshares and Washington Federal’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Southern First Bancshares||$70.54 million||4.66||$13.04 million||N/A||N/A|
|Washington Federal||$601.13 million||4.65||$173.53 million||$1.94||17.24|
Washington Federal has higher revenue and earnings than Southern First Bancshares.
Institutional and Insider Ownership
70.4% of Southern First Bancshares shares are owned by institutional investors. Comparatively, 84.8% of Washington Federal shares are owned by institutional investors. 12.9% of Southern First Bancshares shares are owned by insiders. Comparatively, 1.1% of Washington Federal shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This table compares Southern First Bancshares and Washington Federal’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Southern First Bancshares||21.88%||11.13%||1.02%|
This is a breakdown of current ratings and price targets for Southern First Bancshares and Washington Federal, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Southern First Bancshares||0||1||1||0||2.50|
Southern First Bancshares presently has a consensus target price of $42.00, indicating a potential downside of 4.98%. Washington Federal has a consensus target price of $36.00, indicating a potential upside of 7.62%. Given Washington Federal’s higher probable upside, analysts clearly believe Washington Federal is more favorable than Southern First Bancshares.
Washington Federal beats Southern First Bancshares on 9 of the 16 factors compared between the two stocks.
About Southern First Bancshares
Southern First Bancshares, Inc. operates as the bank holding company for Southern First Bank that provides various banking products and services to general public in South Carolina, North Carolina, and Georgia. It accepts various deposit products that include checking accounts, commercial checking accounts, savings accounts, and other time deposits, including daily money market accounts and certificates of deposit. The company's loan portfolio comprises commercial real estate loans; construction real estate loans; commercial business loans for various lines of businesses, such as the manufacturing, service industry, and professional service areas; consumer real estate and home equity loans; and other consumer loans, including secured and unsecured installment loans and revolving lines of credit. In addition, it provides other bank services, such as Internet banking, cash management, safe deposit boxes, direct deposit, automatic drafts, bill payment, and mobile banking services. The company operates through nine retail offices located in Greenville, Columbia, and Charleston; one located in Raleigh; and one located in Atlanta. Southern First Bancshares, Inc. was founded in 1999 and is headquartered in Greenville, South Carolina.
About Washington Federal
Washington Federal, Inc. operates as the bank holding company for Washington Federal, National Association that provides lending, depository, insurance, and other banking services to consumers, mid-sized and large businesses, and owners and developers of commercial real estate in the United States. The company accepts deposit products, such as business and personal checking accounts, and term certificates of deposit, as well as money market accounts and passbook savings accounts. It also offers single-family residential, construction, land acquisition and development, multi-family residential, commercial and industrial, home equity, and business loans. In addition, the company is involved insurance brokerage activities. As of September 30, 2017, it had 237 branches located in Washington, Oregon, Idaho, Arizona, Utah, Nevada, New Mexico, and Texas. Washington Federal, Inc. was founded in 1917 and is headquartered in Seattle, Washington.
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