Security Federal (OTCMKTS:SFDL – Get Free Report) and Regions Financial (NYSE:RF – Get Free Report) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.
Risk & Volatility
Security Federal has a beta of 0.43, indicating that its share price is 57% less volatile than the S&P 500. Comparatively, Regions Financial has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.
Valuation & Earnings
This table compares Security Federal and Regions Financial”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Security Federal | $90.14 million | 1.25 | $13.67 million | $4.00 | 9.13 |
| Regions Financial | $9.61 billion | 2.54 | $2.16 billion | $2.40 | 11.91 |
Regions Financial has higher revenue and earnings than Security Federal. Security Federal is trading at a lower price-to-earnings ratio than Regions Financial, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of recent ratings for Security Federal and Regions Financial, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Security Federal | 0 | 0 | 0 | 0 | 0.00 |
| Regions Financial | 3 | 8 | 7 | 0 | 2.22 |
Regions Financial has a consensus price target of $30.47, indicating a potential upside of 6.63%. Given Regions Financial’s stronger consensus rating and higher probable upside, analysts clearly believe Regions Financial is more favorable than Security Federal.
Dividends
Security Federal pays an annual dividend of $0.64 per share and has a dividend yield of 1.8%. Regions Financial pays an annual dividend of $1.06 per share and has a dividend yield of 3.7%. Security Federal pays out 16.0% of its earnings in the form of a dividend. Regions Financial pays out 44.2% 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. Regions Financial has raised its dividend for 12 consecutive years. Regions Financial is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
79.4% of Regions Financial shares are owned by institutional investors. 36.4% of Security Federal shares are owned by insiders. Comparatively, 0.3% of Regions Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Security Federal and Regions Financial’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Security Federal | 15.72% | 12.60% | 0.88% |
| Regions Financial | 23.13% | 12.70% | 1.40% |
Summary
Regions Financial beats Security Federal on 14 of the 17 factors compared between the two stocks.
About Security Federal
Security Federal Corporation operates as the bank holding company for Security Federal Bank that provides various banking products and services. It offers various deposit products, such as savings and checking accounts, money market accounts, fixed interest rate certificates with varying maturities, and individual retirement accounts. The company provides real estate loans comprising commercial real estate loans secured by non-residential commercial properties, churches, hotels, residential developments, and multi-family dwellings; one-to-four family residential real estate loans; and construction loans and loans for the acquisition, development, and construction of residential subdivisions and commercial projects. In addition, it offers commercial and agricultural business loans secured by business equipment, furniture and fixtures, inventory, and receivables, or unsecured; and consumer loans including home improvements, residential lots, mortgage, automobiles, boats, mobile homes, recreational vehicles, and education. The company offers trust, financial planning, and financial management services; and insurance agency services, such as auto, business, and home insurance. Additionally, it invests in various types of liquid assets, including U.S. Treasury obligations and securities of various federal agencies, certificates of deposit at insured institutions, mutual funds, bankers' acceptances, and federal funds, as well as commercial paper and corporate debt securities. It through branch offices in Aiken, Lexington, Richland and Saluda counties in South Carolina and Columbia; and Richmond counties in Georgia. Security Federal Corporation was founded in 1922 and is headquartered in Aiken, South Carolina.
About Regions Financial
Regions Financial Corporation, a financial holding company, provides banking and bank-related services to individual and corporate customers. It operates through three segments: Corporate Bank, Consumer Bank, and Wealth Management. The Corporate Bank segment offers commercial banking services, such as commercial and industrial, commercial real estate, and investor real estate lending; equipment lease financing; deposit products; and securities underwriting and placement, loan syndication and placement, foreign exchange, derivatives, merger and acquisition, and other advisory services. It serves corporate, middle market, and commercial real estate developers and investors. The Consumer Bank segment provides consumer banking products and services related to residential first mortgages, home equity lines and loans, consumer credit cards, and other consumer loans, as well as deposits. The Wealth Management segment offers credit related products, and retirement and savings solutions; and trust and investment management, asset management, and estate planning services to individuals, businesses, governmental institutions, and non-profit entities. It also provides investment and insurance products; low-income housing tax credit corporate fund syndication services; and other specialty financing services. The company was founded in 1971 and is headquartered in Birmingham, Alabama.
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