Capitol Federal Financial (NASDAQ:CFFN) vs. Flagstar Bancorp (NASDAQ:FBC) Head to Head Analysis

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Flagstar Bancorp (NYSE:FBC) and Capitol Federal Financial (NASDAQ:CFFN) are both small-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Valuation & Earnings

This table compares Flagstar Bancorp and Capitol Federal Financial’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Flagstar Bancorp $1.40 billion 1.22 $218.00 million $3.46 8.67
Capitol Federal Financial $351.91 million 3.78 $94.24 million $0.68 13.84

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

Insider and Institutional Ownership

96.6% of Flagstar Bancorp shares are owned by institutional investors. Comparatively, 74.0% of Capitol Federal Financial shares are owned by institutional investors. 37.7% of Flagstar Bancorp shares are owned by insiders. Comparatively, 2.1% of Capitol Federal Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Flagstar Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 3.6%. Flagstar Bancorp pays out 5.8% of its earnings in the form of a dividend. Capitol Federal Financial pays out 50.0% 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. Flagstar Bancorp has raised its dividend for 1 consecutive years and Capitol Federal Financial has raised its dividend for 1 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for Flagstar Bancorp and Capitol Federal Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Flagstar Bancorp 0 0 3 1 3.25
Capitol Federal Financial 0 0 1 0 3.00

Flagstar Bancorp currently has a consensus target price of $38.75, suggesting a potential upside of 29.12%. Capitol Federal Financial has a consensus target price of $15.00, suggesting a potential upside of 59.40%. Given Capitol Federal Financial’s higher possible upside, analysts plainly believe Capitol Federal Financial is more favorable than Flagstar Bancorp.

Profitability

This table compares Flagstar Bancorp and Capitol Federal Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Flagstar Bancorp 16.78% 15.43% 1.14%
Capitol Federal Financial 20.36% 5.25% 0.73%

Volatility and Risk

Flagstar Bancorp has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500. Comparatively, Capitol Federal Financial has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500.

Summary

Flagstar Bancorp beats Capitol Federal Financial on 12 of the 17 factors compared between the two stocks.

Flagstar Bancorp Company Profile

Flagstar Bancorp, Inc. operates as a savings and loan holding company for Flagstar Bank, FSB that provides commercial and consumer banking services to individuals and businesses in the United States. Its Community Banking segment offers various products, such as checking accounts, savings accounts, money market accounts, certificates of deposit, consumer and commercial loans, commercial real estate loans, equipment finance and leasing, home builder finance loans, and warehouse lines of credit. It also provides other financial services, including consumer and corporate card services, customized treasury management solutions, merchant services, and capital markets services, such as loan syndications, as well as wealth management products and services. This segment serves consumer, business, and mortgage lending customers through its branch banking, business and commercial banking, government banking, warehouse lending, and loans held-for-investment (LHFI) portfolio groups. The company's Mortgage Originations segment originates, acquires, and sells one-to-four family residential mortgage loans through mortgage branches, call centers, the Internet, and third party counterparties. Its Mortgage Servicing segment offers services and subservices mortgage loans; and the servicing of residential mortgages for its LHFI portfolio, as well as noninterest-bearing escrow services. As of December 31, 2018, the company provided banking services through 160 full service banking branches; and home loans through a wholesale network of brokers and correspondents in 50 states, as well as 75 retail locations in 24 states. Flagstar Bancorp, Inc. was founded in 1987 and is headquartered in Troy, Michigan.

Capitol Federal Financial Company Profile

Capitol Federal Financial, Inc. operates as the holding company for Capitol Federal Savings Bank that provides various retail banking products and services in the United States. The company accepts a range of deposit products, including savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposits. It also provides various loan products, such as one- to four-family residential real estate loans; construction-to-permanent loans; consumer loans comprising home equity loans and lines of credit, home improvement loans, vehicle loans, and loans secured by savings deposits; and commercial real estate loans that include various property types, which comprise hotels, office and retail buildings, senior housing facilities, and multi-family dwellings located in Texas, Missouri, Kansas, Kentucky, Nebraska, Colorado, Arkansas, California, Montana, and Arizona. In addition, the company offers mobile, telephone, and online banking services, as well as bill payment services; operates a call center; invests in various securities; and engages in the reinsurance and real estate businesses. It operates a network of 58 branches, including 48 traditional branches and 10 in-store branches located in 9 counties throughout Kansas and 3 counties in Missouri. The company serves the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia, and Salina, Kansas, as well as the metropolitan area of greater Kansas. Capitol Federal Financial, Inc. was founded in 1893 and is headquartered in Topeka, Kansas.

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