Security Federal (OTCMKTS:SFDL – Get Rating) and Independent Bank Group (NASDAQ:IBTX – Get Rating) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, profitability, earnings, analyst recommendations and dividends.
Insider & Institutional Ownership
75.8% of Independent Bank Group shares are owned by institutional investors. 35.7% of Security Federal shares are owned by insiders. Comparatively, 3.3% of Independent Bank Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Security Federal and Independent Bank Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Security Federal||$52.19 million||1.87||$10.23 million||$3.15||9.52|
|Independent Bank Group||$706.48 million||3.32||$196.29 million||$4.69||12.15|
Security Federal pays an annual dividend of $0.52 per share and has a dividend yield of 1.7%. Independent Bank Group pays an annual dividend of $1.52 per share and has a dividend yield of 2.7%. Security Federal pays out 16.5% of its earnings in the form of a dividend. Independent Bank Group pays out 32.4% 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. Independent Bank Group has raised its dividend for 5 consecutive years. Independent Bank Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a breakdown of recent ratings and recommmendations for Security Federal and Independent Bank Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Independent Bank Group||0||2||3||0||2.60|
Independent Bank Group has a consensus price target of $72.50, suggesting a potential upside of 27.22%. Given Independent Bank Group’s higher probable upside, analysts plainly believe Independent Bank Group is more favorable than Security Federal.
This table compares Security Federal and Independent Bank Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Independent Bank Group||27.78%||8.72%||1.16%|
Volatility & Risk
Security Federal has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500. Comparatively, Independent Bank Group has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.
Independent Bank Group beats Security Federal on 13 of the 16 factors compared between the two stocks.
About Security Federal
Security Federal Corp. is a bank holding company for Security Federal Bank, which engages in accepting deposits from the general public and originating commercial real estate loans, commercial business loans, consumer loans, and mortgage loans to buy or refinance one-to-four family residential real estate. Its products and services include personal savings and loans, online and mobile banking, investment services, home, auto, and business insurance, trust services, credit cards, business loans, and business credit cards. The company was founded in July 1987 and is headquartered in Aiken, SC.
About Independent Bank Group
Independent Bank Group, Inc. is a bank holding company, which engages in the provision of a relationship-driven commercial banking products and services tailored to meet the needs of businesses, professionals and individuals. It offers checking, savings, commercial loans, business services and cash management solutions. The company was founded by David R. Brooks in 1988 and is headquartered in McKinney, TX.
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