ServisFirst Bancshares (NYSE:SFBS) versus TFS Financial (NASDAQ:TFSL) Head-To-Head Comparison

ServisFirst Bancshares (NYSE:SFBS) and TFS Financial (NASDAQ:TFSL) are both mid-cap finance companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
ServisFirst Bancshares	26.95%	16.36%	1.61%
TFS Financial	11.29%	4.79%	0.52%

Insider and Institutional Ownership

67.3% of ServisFirst Bancshares shares are held by institutional investors. Comparatively, 9.8% of TFS Financial shares are held by institutional investors. 6.7% of ServisFirst Bancshares shares are held by insiders. Comparatively, 0.7% of TFS Financial shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

ServisFirst Bancshares pays an annual dividend of $1.52 per share and has a dividend yield of 2.0%. TFS Financial pays an annual dividend of $1.13 per share and has a dividend yield of 8.2%. ServisFirst Bancshares pays out 30.0% of its earnings in the form of a dividend. TFS Financial pays out 353.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ServisFirst Bancshares has increased its dividend for 10 consecutive years.

Earnings and Valuation

This table compares ServisFirst Bancshares and TFS Financial”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServisFirst Bancshares	$555.79 million	7.34	$276.60 million	$5.06	14.76
TFS Financial	$791.96 million	4.86	$90.96 million	$0.32	42.88

ServisFirst Bancshares has higher earnings, but lower revenue than TFS Financial. ServisFirst Bancshares is trading at a lower price-to-earnings ratio than TFS Financial, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for ServisFirst Bancshares and TFS Financial, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServisFirst Bancshares	0	1	2	2	3.20
TFS Financial	0	2	1	0	2.33

ServisFirst Bancshares presently has a consensus price target of $93.67, suggesting a potential upside of 25.41%. TFS Financial has a consensus price target of $15.00, suggesting a potential upside of 9.33%. Given ServisFirst Bancshares’ stronger consensus rating and higher probable upside, research analysts plainly believe ServisFirst Bancshares is more favorable than TFS Financial.

Risk & Volatility

ServisFirst Bancshares has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, TFS Financial has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Summary

ServisFirst Bancshares beats TFS Financial on 15 of the 18 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

About TFS Financial

TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. Its deposit products include savings, money market, checking, individual retirement, and other qualified plan accounts, as well as certificates of deposit. 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 offers escrow and settlement services. The company provides its products and services through its main office in Cleveland, Ohio; and multiple full-service branches and loan production offices located throughout the states of Ohio and Florida. TFS Financial Corporation 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.