Analyzing Security Federal Co. (SC) (SFDL) and 1st Source (SRCE)

Security Federal Co. (SC) (OTCMKTS:SFDL) and 1st Source (NASDAQ:SRCE) are both small-cap finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, valuation, earnings and dividends.

Volatility & Risk

Security Federal Co. (SC) has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500. Comparatively, 1st Source has a beta of 1.13, indicating that its stock price is 13% more volatile than the S&P 500.

Dividends

Security Federal Co. (SC) pays an annual dividend of $0.36 per share and has a dividend yield of 1.2%. 1st Source pays an annual dividend of $1.08 per share and has a dividend yield of 2.3%. 1st Source pays out 34.2% of its earnings in the form of a dividend. 1st Source has increased its dividend for 33 consecutive years. 1st Source is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

70.4% of 1st Source shares are held by institutional investors. 34.6% of Security Federal Co. (SC) shares are held by company insiders. Comparatively, 19.9% of 1st Source shares are held by company 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.

Profitability

This table compares Security Federal Co. (SC) and 1st Source’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Security Federal Co. (SC) 17.69% 9.40% 0.81%
1st Source 23.26% 11.06% 1.32%

Analyst Recommendations

This is a summary of current ratings for Security Federal Co. (SC) and 1st Source, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Security Federal Co. (SC) 0 0 0 0 N/A
1st Source 0 0 0 0 N/A

Earnings and Valuation

This table compares Security Federal Co. (SC) and 1st Source’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Security Federal Co. (SC) $40.74 million 2.24 $7.21 million N/A N/A
1st Source $354.37 million 3.53 $82.41 million $3.16 14.90

1st Source has higher revenue and earnings than Security Federal Co. (SC).

Summary

1st Source beats Security Federal Co. (SC) on 11 of the 13 factors compared between the two stocks.

About Security Federal Co. (SC)

Security Federal Corporation operates as the holding company for Security Federal Bank, a state-chartered commercial bank that provides various banking products and services. It accepts various deposit products, such as savings accounts, checking accounts, various money market accounts, fixed interest rate certificates, negotiated rate jumbo certificates of deposit, and individual retirement accounts. The company also originates commercial real estate loans, commercial business loans, and consumer loans, as well as mortgage loans to buy or refinance one-to-four family residential real estate; and construction loans on single-family residences, multi-family dwellings and projects, and commercial real estate. In addition, it provides loans for the acquisition, development, and construction of residential subdivisions and commercial projects. Further, the company offers trust, financial planning, and financial management services; and operates an insurance agency that offers auto, business, life, health, and home insurance products, as well as provides insurance premium financing services. It operates through a network of 15 full service branch offices in Aiken, Ballentine, Clearwater, Columbia, Graniteville, Langley, Lexington, North Augusta, Wagener, and West Columbia, South Carolina, as well as in Evans, Georgia. Security Federal Corporation was founded in 1922 and is headquartered in Aiken, South Carolina.

About 1st Source

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services, trust and investment management services, and insurance to individual and business clients. Its consumer banking services include checking and savings accounts; certificates of deposit; individual retirement accounts; online and mobile banking products; consumer loans, real estate loans, and lines of credit; and financial planning, financial literacy, and other consultative services, as well as debit and credit cards. The company also offers commercial, small business, agricultural, and real estate loans for general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and acquisition financing; and commercial leasing, treasury management, and retirement planning services. In addition, it provides a range of trust, investment, agency, and custodial services comprising administration of estates and personal trusts, as well as management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease products for new and used aircraft, auto and light trucks, construction equipment, and medium and heavy duty trucks; and leases construction equipment, various types of trucks, vans, automobiles, motor coaches, shuttle buses, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services; and investment advisory services to trust and investment clients. As of December 31, 2017, the company operated through 79 banking centers in 17 counties in Indiana and Michigan, and Sarasota County in Florida. 1st Source Corporation was founded in 1863 and is headquartered in South Bend, Indiana.

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