IF Bancorp (NASDAQ:IROQ) vs. Sound Financial Bancorp (NASDAQ:SFBC) Critical Review

Posted by Defense World Staff on Aug 14th, 2023

IF Bancorp (NASDAQ:IROQ – Get Free Report) and Sound Financial Bancorp (NASDAQ:SFBC – Get Free Report) are both small-cap finance companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, profitability, valuation, analyst recommendations, dividends and institutional ownership.

Earnings & Valuation

This table compares IF Bancorp and Sound Financial Bancorp’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IF Bancorp	$30.30 million	1.72	$5.78 million	$1.59	9.76
Sound Financial Bancorp	$44.38 million	2.19	$8.80 million	$4.03	9.26

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

Dividends

IF Bancorp pays an annual dividend of $0.40 per share and has a dividend yield of 2.6%. Sound Financial Bancorp pays an annual dividend of $0.76 per share and has a dividend yield of 2.0%. IF Bancorp pays out 25.2% of its earnings in the form of a dividend. Sound Financial Bancorp pays out 18.9% 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. IF Bancorp has raised its dividend for 2 consecutive years and Sound Financial Bancorp has raised its dividend for 1 consecutive years. IF Bancorp is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares IF Bancorp and Sound Financial Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
IF Bancorp	15.12%	7.18%	0.61%
Sound Financial Bancorp	20.22%	10.85%	1.07%

Risk & Volatility

IF Bancorp has a beta of 0.54, suggesting that its share price is 46% less volatile than the S&P 500. Comparatively, Sound Financial Bancorp has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for IF Bancorp and Sound Financial Bancorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IF Bancorp	0	0	0	0	N/A
Sound Financial Bancorp	0	0	0	0	N/A

Insider and Institutional Ownership

22.8% of IF Bancorp shares are held by institutional investors. Comparatively, 55.6% of Sound Financial Bancorp shares are held by institutional investors. 13.8% of IF Bancorp shares are held by company insiders. Comparatively, 12.5% of Sound Financial Bancorp shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Sound Financial Bancorp beats IF Bancorp on 10 of the 14 factors compared between the two stocks.

About IF Bancorp

(Get Free Report)

IF Bancorp, Inc. operates as a holding company, which engages in directing, planning, and coordinating the business activities of Iroquois Federal Savings. The firm through its subsidiary, offers variety of deposits accounts, including savings accounts, certificate of deposit, money market accounts, commercial and personal checking accounts, individual retirement accounts, and health savings accounts. The company was founded in March 2011 and is headquartered in Watseka, IL.

About Sound Financial Bancorp

(Get Free Report)

Sound Financial Bancorp, Inc. operates as the bank holding company for Sound Community Bank that provides banking and other financial services for consumers and businesses. It accepts various deposits products comprising savings, money market deposit, NOW, and demand accounts, as well as certificates of deposit. The company also offers loans secured by first and second mortgages on one-to four-family residences; home equity loans, including fixed-rate loans and variable-rate lines of credit; commercial and multifamily real estate loans; construction loans secured by single-family residences, and commercial and multifamily real estate; land loans; commercial business loans to finance commercial vehicles and equipment, as well as loans secured by accounts receivable and/or inventory; and secured and unsecured consumer loans, such as new and used manufactured homes, floating homes, automobiles, boats, and recreational vehicle loans, and loans secured by deposit accounts. It operates branch offices in Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow, and University Place; and loan production office in the Madison Park neighborhood of Seattle, Washington. The company was founded in 1953 and is headquartered in Seattle, Washington.

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