Critical Review: Zions Bancorporation, N.A. (NASDAQ:ZION) & Sound Financial Bancorp (NASDAQ:SFBC)

Zions Bancorporation, N.A. (NASDAQ:ZION) and Sound Financial Bancorp (NASDAQ:SFBC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Dividends

Zions Bancorporation, N.A. pays an annual dividend of $1.80 per share and has a dividend yield of 3.2%. Sound Financial Bancorp pays an annual dividend of $0.84 per share and has a dividend yield of 2.0%. Zions Bancorporation, N.A. pays out 30.0% of its earnings in the form of a dividend. Sound Financial Bancorp pays out 30.3% 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. Zions Bancorporation, N.A. has increased its dividend for 12 consecutive years and Sound Financial Bancorp has increased its dividend for 2 consecutive years. Zions Bancorporation, N.A. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Zions Bancorporation, N.A. and Sound Financial Bancorp”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zions Bancorporation, N.A.	$4.94 billion	1.67	$899.00 million	$6.00	9.30
Sound Financial Bancorp	$61.52 million	1.76	$7.16 million	$2.77	15.20

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

Profitability

This table compares Zions Bancorporation, N.A. and Sound Financial Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zions Bancorporation, N.A.	18.19%	13.70%	1.03%
Sound Financial Bancorp	11.64%	6.76%	0.67%

Risk & Volatility

Zions Bancorporation, N.A. has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Sound Financial Bancorp has a beta of 0.11, suggesting that its share price is 89% less volatile than the S&P 500.

Institutional & Insider Ownership

76.8% of Zions Bancorporation, N.A. shares are held by institutional investors. Comparatively, 68.9% of Sound Financial Bancorp shares are held by institutional investors. 1.8% of Zions Bancorporation, N.A. shares are held by company insiders. Comparatively, 12.6% of Sound Financial Bancorp shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Zions Bancorporation, N.A. and Sound Financial Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zions Bancorporation, N.A.	1	13	6	1	2.33
Sound Financial Bancorp	0	1	0	0	2.00

Zions Bancorporation, N.A. currently has a consensus price target of $63.58, suggesting a potential upside of 13.98%. Given Zions Bancorporation, N.A.’s stronger consensus rating and higher probable upside, research analysts clearly believe Zions Bancorporation, N.A. is more favorable than Sound Financial Bancorp.

Summary

Zions Bancorporation, N.A. beats Sound Financial Bancorp on 15 of the 18 factors compared between the two stocks.

About Zions Bancorporation, N.A.

Zions Bancorporation, National Association provides various banking products and related services primarily in the states of Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming. It operates through Zions Bank, California Bank & Trust, Amegy Bank, National Bank of Arizona, Nevada State Bank, Vectra Bank Colorado, and The Commerce Bank of Washington segments. The company offers commercial and small business banking services to small- and medium-sized businesses, such as commercial, industrial, and owner-occupied lending and leasing; municipal and public finance services; depository account and cash management services; commercial and small business cards; merchant processing services; corporate trust services; and correspondent banking and international lending services. It also provides capital markets and investment banking services, including loan syndications, foreign exchange services, interest rate derivatives, fixed income securities underwriting, advisory and capital raising, commercial mortgage-backed security conduit lending, and power and project financing; and commercial real estate lending services consisting of term and construction/land development financing for commercial and residential purposes. In addition, the company offers retail banking services comprising residential mortgages, home equity lines of credit, personal lines of credit, installment consumer loans, depository account services, consumer cards, and personal trust services; and wealth management services consisting of investment management, fiduciary and estate, and advanced business succession and estate planning services. The company was formerly known as ZB, National Association and changed its name to Zions Bancorporation, National Association in September 2018. Zions Bancorporation, National Association was founded in 1873 and is headquartered in Salt Lake City, Utah.

About Sound Financial Bancorp

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. The company was founded in 1953 and is headquartered in Seattle, Washington.