Kearny Financial (NASDAQ:KRNY) versus WSFS Financial (NASDAQ:WSFS) Critical Analysis

WSFS Financial (NASDAQ:WSFS) and Kearny Financial (NASDAQ:KRNY) are both finance companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.

Dividends

WSFS Financial pays an annual dividend of $0.68 per share and has a dividend yield of 1.1%. Kearny Financial pays an annual dividend of $0.44 per share and has a dividend yield of 5.9%. WSFS Financial pays out 13.3% of its earnings in the form of a dividend. Kearny Financial pays out 84.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. WSFS Financial has increased its dividend for 1 consecutive years.

Institutional & Insider Ownership

88.5% of WSFS Financial shares are held by institutional investors. Comparatively, 71.0% of Kearny Financial shares are held by institutional investors. 1.2% of WSFS Financial shares are held by insiders. Comparatively, 7.4% of Kearny Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for WSFS Financial and Kearny Financial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WSFS Financial	0	3	3	1	2.71
Kearny Financial	0	2	1	0	2.33

WSFS Financial currently has a consensus target price of $69.80, indicating a potential upside of 11.25%. Kearny Financial has a consensus target price of $8.00, indicating a potential upside of 7.82%. Given WSFS Financial’s stronger consensus rating and higher possible upside, equities research analysts clearly believe WSFS Financial is more favorable than Kearny Financial.

Profitability

This table compares WSFS Financial and Kearny Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WSFS Financial	21.14%	10.89%	1.41%
Kearny Financial	9.41%	4.26%	0.42%

Risk and Volatility

WSFS Financial has a beta of 0.76, suggesting that its share price is 24% less volatile than the S&P 500. Comparatively, Kearny Financial has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Earnings & Valuation

This table compares WSFS Financial and Kearny Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WSFS Financial	$1.36 billion	2.43	$287.35 million	$5.10	12.30
Kearny Financial	$343.53 million	1.40	$26.08 million	$0.52	14.27

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

Summary

WSFS Financial beats Kearny Financial on 15 of the 18 factors compared between the two stocks.

About WSFS Financial

WSFS Financial Corporation operates as the savings and loan holding company for the Wilmington Savings Fund Society, FSB that provides various banking services in the United States. It operates through three segments: WSFS Bank, Cash Connect, and Wealth Management. It offers various deposit products, including savings accounts, demand deposits, interest-bearing demand deposits, money market deposit accounts, and certificates of deposit, as well as accepts jumbo certificates of deposit from individuals, businesses, and municipalities. The company also provides a range of loans, which comprise fixed and adjustable rate residential loans; commercial mortgage and commercial loans; commercial construction loans; commercial loans for working capital, financing equipment and real estate acquisitions, business expansion and other business purposes; and consumer credit products, such as home equity loans, home equity lines of credit, automobile loans, unsecured lines of credit, and other secured and unsecured personal installment loans. In addition, it offers insurance products; planning and advisory services, investment management, trust services, and credit and deposit products to individual, corporate and institutional clients; retail securities and insurance brokerage services; mortgage and title services; residential mortgage and refinancing solutions; and leases small equipment and fixed assets, as well as provides financial planning, customized investment strategies, brokerage products, fiduciary, and wealth management services. Further, the company provides ATM vault cash, smart safe, and other cash logistics services; and online reporting and ATM cash management, predictive cash ordering and reconcilement services, armored carrier management, loss protection, and deposit safe cash logistics services, as well as trustee, agency, bankruptcy administration, custodial and commercial domicile services. The company was founded in 1832 and is based in Wilmington, Delaware.

About Kearny Financial

Kearny Financial Corp. operates as the holding company for Kearny Bank that provides various banking products and services in the United States. It offers various deposit products, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, savings accounts, and certificates of deposit accounts. The company also provides various loans, such as multi-family and nonresidential real estate mortgage loans, commercial term loans and lines of credit, one- to four-family residential mortgage loans, and home equity loans and lines of credit; loans to individuals, builders, or developers for the construction of multi-family residential buildings or commercial real estate, or for the construction or renovation of one- to four-family residences; overdraft lines of credit; and personal loans. In addition, it engages in the investment activities. Kearny Financial Corp. was founded in 1884 and is headquartered in Fairfield, New Jersey.