Chesapeake Financial Shares (OTCMKTS:CPKF) versus Security Federal (OTCMKTS:SFDL) Financial Analysis

Volatility & Risk

Chesapeake Financial Shares has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500. Comparatively, Security Federal has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500.

Profitability

This table compares Chesapeake Financial Shares and Security Federal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chesapeake Financial Shares	6.72%	11.94%	0.87%
Security Federal	15.17%	12.61%	0.85%

Insider and Institutional Ownership

3.7% of Chesapeake Financial Shares shares are held by institutional investors. 39.5% of Chesapeake Financial Shares shares are held by company insiders. Comparatively, 36.4% of Security Federal shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Chesapeake Financial Shares and Security Federal”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chesapeake Financial Shares	$99.39 million	1.51	$11.43 million	$1.40	22.82
Security Federal	$90.14 million	1.17	$13.67 million	$3.81	8.88

Security Federal has lower revenue, but higher earnings than Chesapeake Financial Shares. Security Federal is trading at a lower price-to-earnings ratio than Chesapeake Financial Shares, indicating that it is currently the more affordable of the two stocks.

Dividends

Chesapeake Financial Shares pays an annual dividend of $0.68 per share and has a dividend yield of 2.1%. Security Federal pays an annual dividend of $0.60 per share and has a dividend yield of 1.8%. Chesapeake Financial Shares pays out 48.6% of its earnings in the form of a dividend. Security Federal pays out 15.7% 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.

Summary

Chesapeake Financial Shares beats Security Federal on 7 of the 13 factors compared between the two stocks.

About Chesapeake Financial Shares

Chesapeake Financial Shares, Inc. operates as the bank holding company for Chesapeake Bank that provides various banking products and services for individuals and businesses in the United States. The company accepts interest and noninterest checking, savings, and money market accounts; and variable-rate and fixed-term money market accounts, as well as certificates of deposit. It also offers mortgage, and single-family residential and residential construction loans; commercial loans, which include owner-occupied commercial development, retail, builders/contractors, medical, service and professional, hospitality, nonprofits, marine industry, and agricultural and seafood loans; and consumer and other loans. In addition, the company provides merchant processing, accounts receivable financing, wealth management and trust, and mortgage banking services, as well as cash management services. The company was founded in 1900 and is based in Kilmarnock, Virginia.

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.