Reviewing TFS Financial (TFSL) & Central Federal (NASDAQ:CFBK)

Central Federal (NASDAQ:CFBK) and TFS Financial (NASDAQ:TFSL) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Dividends

TFS Financial pays an annual dividend of $1.00 per share and has a dividend yield of 6.0%. Central Federal does not pay a dividend. TFS Financial pays out 312.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TFS Financial has increased its dividend for 2 consecutive years.

Insider and Institutional Ownership

24.0% of Central Federal shares are held by institutional investors. Comparatively, 10.9% of TFS Financial shares are held by institutional investors. 18.2% of Central Federal shares are held by insiders. Comparatively, 1.6% of TFS Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Central Federal has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500. Comparatively, TFS Financial has a beta of 0.28, indicating that its stock price is 72% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Central Federal and TFS Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Central Federal 0 0 0 0 N/A
TFS Financial 0 0 1 0 3.00

TFS Financial has a consensus price target of $18.00, indicating a potential upside of 7.72%. Given TFS Financial’s higher possible upside, analysts plainly believe TFS Financial is more favorable than Central Federal.

Earnings & Valuation

This table compares Central Federal and TFS Financial’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Central Federal $17.95 million 2.90 $1.34 million N/A N/A
TFS Financial $464.58 million 10.08 $85.40 million $0.32 52.22

TFS Financial has higher revenue and earnings than Central Federal.

Profitability

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

Net Margins Return on Equity Return on Assets
Central Federal 10.97% 8.74% 0.67%
TFS Financial 18.38% 5.19% 0.64%

Summary

TFS Financial beats Central Federal on 9 of the 15 factors compared between the two stocks.

About Central Federal

Central Federal Corporation operates as the bank holding company for CFBank that provides various financial services in the United States. The company accepts savings, retail and business checking, and money market accounts, as well as certificates of deposit. It also offers single-family mortgage loans; commercial real estate and multi-family residential mortgage loans; commercial loans; construction and land loans; and consumer loans, such as home equity lines of credit, automobile loans, home improvement loans, and loans secured by deposits, as well as other loans. In addition, the company provides Internet and mobile banking, remote deposit, and corporate treasury management services. It operates through four branch offices located in Summit, Columbiana, Hamilton, and Franklin Counties; and an agency office located in Cuyahoga County, Ohio. Central Federal Corporation was founded in 1892 and is based in Worthington, Ohio.

About TFS Financial

TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. Its deposit products include savings accounts, checking accounts, certificate of deposit accounts, individual retirement accounts, and other qualified plan accounts. The company also provides residential real estate mortgage loans, residential construction loans, and home equity loans and lines of credit, as well as purchase mortgages and first mortgage refinance loans. In addition, it engages in the net lease transactions of commercial buildings; provision of escrow and settlement services. The company offers its products and services through its main office in Cleveland, Ohio; and 38 full-service branches and 8 loan production offices located throughout the states of Ohio and Florida. The company was founded in 1938 and is headquartered in Cleveland, Ohio. TFS Financial Corporation is a subsidiary of Third Federal Savings and Loan Association of Cleveland, MHC.

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