Head-To-Head Analysis: Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL) and Sturgis Bancorp (OTCMKTS:STBI)

Sturgis Bancorp (OTCMKTS:STBI) and Home Federal Bancorp, Inc. of Louisiana (NASDAQ:HFBL) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Sturgis Bancorp and Home Federal Bancorp, Inc. of Louisiana, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sturgis Bancorp	0	0	0	0	0.00
Home Federal Bancorp, Inc. of Louisiana	0	1	0	0	2.00

Volatility & Risk

Sturgis Bancorp has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500. Comparatively, Home Federal Bancorp, Inc. of Louisiana has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500.

Profitability

This table compares Sturgis Bancorp and Home Federal Bancorp, Inc. of Louisiana’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sturgis Bancorp	13.20%	N/A	N/A
Home Federal Bancorp, Inc. of Louisiana	17.27%	10.42%	0.95%

Institutional and Insider Ownership

21.1% of Home Federal Bancorp, Inc. of Louisiana shares are owned by institutional investors. 16.0% of Sturgis Bancorp shares are owned by insiders. Comparatively, 19.4% of Home Federal Bancorp, Inc. of Louisiana shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Dividends

Sturgis Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 2.8%. Home Federal Bancorp, Inc. of Louisiana pays an annual dividend of $0.54 per share and has a dividend yield of 2.7%. Sturgis Bancorp pays out 19.7% of its earnings in the form of a dividend. Home Federal Bancorp, Inc. of Louisiana pays out 28.1% 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. Home Federal Bancorp, Inc. of Louisiana has increased its dividend for 11 consecutive years. Sturgis Bancorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Sturgis Bancorp and Home Federal Bancorp, Inc. of Louisiana”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sturgis Bancorp	$59.13 million	0.95	$7.46 million	$3.66	7.08
Home Federal Bancorp, Inc. of Louisiana	$32.47 million	1.88	$3.89 million	$1.92	10.45

Sturgis Bancorp has higher revenue and earnings than Home Federal Bancorp, Inc. of Louisiana. Sturgis Bancorp is trading at a lower price-to-earnings ratio than Home Federal Bancorp, Inc. of Louisiana, indicating that it is currently the more affordable of the two stocks.

Summary

Home Federal Bancorp, Inc. of Louisiana beats Sturgis Bancorp on 10 of the 15 factors compared between the two stocks.

About Sturgis Bancorp

Sturgis Bancorp, Inc. operates as the bank holding company for Sturgis Bank & Trust Company that provides banking products and services in Michigan, the United States. The company offers checking, savings and health savings, and money market accounts; and certificates of deposit and individual retirement accounts. It also provides mortgage, automobile, savings secured, personal, home equity, equipment and machinery, government supported, and commercial real estate loans, as well as home equity lines of credit and business lines of credit; and credit cards. In addition, the company offers private banking, cashier checks, wire transfers, foreign drafts and foreign currency, overdraft protection, night depository, and notary services, as well as safe deposit boxes and residential mortgages. Further, it provides direct deposit, remote deposit capture, Visa check card, and checks reorder services; and investment and financial-advisory services, as well as commercial and consumer insurance and title insurance products. Additionally, the company offers estate and asset management services, such as estate settlements, trust administration, record keeping, investment management, and custody services; cash and treasury management; and online and mobile banking, bill pay, and mobile wallet services. It operates through 14 bank facilities and 4 full service standalone ATMs located in 12 communities in Michigan. Sturgis Bancorp, Inc. was founded in 1905 and is headquartered in Sturgis, Michigan.

About Home Federal Bancorp, Inc. of Louisiana

Home Federal Bancorp, Inc. of Louisiana operates as the holding company for Home Federal Bank that provides various financial services to individuals, corporate entities, and other organizations. The company accepts various deposits, such as passbook savings, certificates of deposit, and demand deposit accounts. Its loan products include one-to-four family residential real estate loans; commercial real estate secured loans; multi-family residential loans; commercial business loans; land loans; construction loans; home equity and second mortgage loans; lines of credit; and consumer non-real estate loans, including loans secured by deposit accounts, automobile loans, overdrafts, and other unsecured loans. The company operates through branches in Shreveport, Bossier City, Minden, and Benton, Louisiana. The company was founded in 1924 and is based in Shreveport, Louisiana.