Financial Contrast: TFS Financial (NASDAQ:TFSL) & Timberland Bancorp (NASDAQ:TSBK)

TFS Financial (NASDAQ:TFSL) and Timberland Bancorp (NASDAQ:TSBK) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.

Earnings and Valuation

This table compares TFS Financial and Timberland Bancorp”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TFS Financial	$336.50 million	13.05	$90.96 million	$0.33	47.45
Timberland Bancorp	$114.63 million	2.74	$29.16 million	$3.91	10.27

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

Profitability

This table compares TFS Financial and Timberland Bancorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TFS Financial	11.42%	4.89%	0.53%
Timberland Bancorp	26.22%	11.67%	1.54%

Institutional and Insider Ownership

9.8% of TFS Financial shares are held by institutional investors. Comparatively, 65.5% of Timberland Bancorp shares are held by institutional investors. 0.7% of TFS Financial shares are held by insiders. Comparatively, 3.6% of Timberland Bancorp shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

TFS Financial pays an annual dividend of $1.13 per share and has a dividend yield of 7.2%. Timberland Bancorp pays an annual dividend of $1.16 per share and has a dividend yield of 2.9%. TFS Financial pays out 342.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Timberland Bancorp pays out 29.7% of its earnings in the form of a dividend. Timberland Bancorp has raised its dividend for 13 consecutive years.

Risk and Volatility

TFS Financial has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, Timberland Bancorp has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for TFS Financial and Timberland Bancorp, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TFS Financial	0	3	1	0	2.25
Timberland Bancorp	0	0	1	0	3.00

TFS Financial currently has a consensus price target of $15.50, suggesting a potential downside of 1.02%. Given TFS Financial’s higher possible upside, research analysts plainly believe TFS Financial is more favorable than Timberland Bancorp.

Summary

Timberland Bancorp beats TFS Financial on 9 of the 16 factors compared between the two stocks.

About TFS Financial

TFS Financial Corporation, through its subsidiaries, provides retail consumer banking services in the United States. Its deposit products include savings, money market, checking, individual retirement, and other qualified plan accounts, as well as certificates of deposit. The company also provides residential real estate mortgage loans, residential construction loans, and home equity loans and lines of credit, as well as purchase mortgages and first mortgage refinance loans. In addition, it offers escrow and settlement services. The company provides its products and services through its main office in Cleveland, Ohio; and multiple full-service branches and loan production offices located throughout the states of Ohio and Florida. TFS Financial Corporation was founded in 1938 and is headquartered in Cleveland, Ohio. TFS Financial Corporation is a subsidiary of Third Federal Savings and Loan Association of Cleveland, MHC.

About Timberland Bancorp

Timberland Bancorp, Inc. operates as the bank holding company for Timberland Bank that provides various community banking services in Washington. It offers various deposit products, including money market deposit, checking, and regular savings accounts, as well as certificates of deposit. The company also provides one-to four-family residential, multi-family, and commercial real estate loans; and construction lending products, such as custom and owner/builder, speculative one- to four-family, commercial, multi-family, land development, and land development. In addition, it offers consumer loans comprising home equity lines of credit and second mortgage loans, automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans, and unsecured loans; and commercial business loans. Timberland Bancorp, Inc. was founded in 1915 and is headquartered in Hoquiam, Washington.