Reviewing Summit State Bank (NASDAQ:SSBI) & Sound Financial Bancorp (NASDAQ:SFBC)

Summit State Bank (NASDAQ:SSBI) and Sound Financial Bancorp (NASDAQ:SFBC) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Summit State Bank and Sound Financial Bancorp, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Summit State Bank	1	0	0	0	1.00
Sound Financial Bancorp	0	1	0	0	2.00

Insider & Institutional Ownership

68.9% of Sound Financial Bancorp shares are owned by institutional investors. 12.4% of Sound Financial Bancorp shares are owned by company 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.

Earnings and Valuation

This table compares Summit State Bank 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
Summit State Bank	$58.82 million	1.53	$6.80 million	$1.01	13.17
Sound Financial Bancorp	$61.52 million	1.81	$7.16 million	$2.77	15.64

Sound Financial Bancorp has higher revenue and earnings than Summit State Bank. Summit State Bank 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 Summit State Bank and Sound Financial Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Summit State Bank	11.55%	N/A	N/A
Sound Financial Bancorp	11.64%	6.70%	0.67%

Risk and Volatility

Summit State Bank has a beta of 0.19, suggesting that its share price is 81% 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.

Summary

Sound Financial Bancorp beats Summit State Bank on 11 of the 12 factors compared between the two stocks.

About Summit State Bank

Summit State Bank engages in providing an array of financial services to small and medium-sized businesses, their owners and employees, entrepreneurs, high net worth families, foundations, estates, and individual consumers. It specializes in business services, personal accounts, nonprofit programs, and mobile banking ranging from lending, checking, merchant, eBanking, automated teller machines, equity loans, and others. The company was founded on December 20, 1982 and is headquartered in Santa Rosa, CA.

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.