Head-To-Head Analysis: Kearny Financial (NASDAQ:KRNY) and ServisFirst Bancshares (NYSE:SFBS)

ServisFirst Bancshares (NYSE:SFBS) and Kearny Financial (NASDAQ:KRNY) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Dividends

ServisFirst Bancshares pays an annual dividend of $1.34 per share and has a dividend yield of 1.8%. Kearny Financial pays an annual dividend of $0.44 per share and has a dividend yield of 5.6%. ServisFirst Bancshares pays out 28.7% of its earnings in the form of a dividend. Kearny Financial pays out 93.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ServisFirst Bancshares has raised its dividend for 10 consecutive years.

Volatility & Risk

ServisFirst Bancshares has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Kearny Financial has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Insider & Institutional Ownership

67.3% of ServisFirst Bancshares shares are owned by institutional investors. Comparatively, 71.0% of Kearny Financial shares are owned by institutional investors. 6.7% of ServisFirst Bancshares shares are owned by insiders. Comparatively, 7.4% of Kearny Financial shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares ServisFirst Bancshares and Kearny Financial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ServisFirst Bancshares	$981.18 million	4.04	$227.24 million	$4.67	15.54
Kearny Financial	$343.53 million	1.49	$26.08 million	$0.47	16.78

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

Analyst Ratings

This is a breakdown of current ratings and recommmendations for ServisFirst Bancshares and Kearny Financial, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ServisFirst Bancshares	1	2	2	0	2.20
Kearny Financial	0	2	1	0	2.33

ServisFirst Bancshares presently has a consensus price target of $88.00, suggesting a potential upside of 21.30%. Kearny Financial has a consensus price target of $8.00, suggesting a potential upside of 1.46%. Given ServisFirst Bancshares’ higher possible upside, equities analysts plainly believe ServisFirst Bancshares is more favorable than Kearny Financial.

Profitability

This table compares ServisFirst Bancshares and Kearny Financial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ServisFirst Bancshares	25.24%	15.67%	1.50%
Kearny Financial	8.57%	3.89%	0.38%

Summary

ServisFirst Bancshares beats Kearny Financial on 12 of the 17 factors compared between the two stocks.

About ServisFirst Bancshares

ServisFirst Bancshares, Inc. operates as the bank holding company for ServisFirst Bank that provides various banking services to individual and corporate customers. It accepts demand, time, savings, and other deposits; checking, money market, and IRA accounts; and certificates of deposit. The company's loan products include commercial lending products, including seasonal, bridge, and term loans for working capital, expansion of the business, acquisition of property, and plant and equipment, as well as commercial lines of credit; commercial real estate loans, construction and development loans, and residential real estate loans; and consumer loans, such as home equity loans, vehicle financing, loans secured by deposits, and secured and unsecured personal loans. It also offers other banking products and services comprising telephone and mobile banking, Internet banking, direct deposit, traveler's checks, safe deposit boxes, attorney trust accounts, automatic account transfers, automated teller machines, and debit and credit card systems; treasury and cash management services; wire transfer, night depository, banking-by-mail, and remote capture services; and correspondent banking services to other financial institutions. In addition, the company holds and manages participations in residential mortgages and commercial real estate loans originated by ServisFirst Bank in Alabama, Florida, Georgia, and Tennessee. The company was founded in 2005 and is headquartered in Birmingham, Alabama.

About Kearny Financial

Kearny Financial Corp. operates as the holding company for Kearny Bank that provides various banking products and services in the United States. It offers various deposit products, including interest-bearing and non-interest-bearing checking accounts, money market deposit accounts, savings accounts, and certificates of deposit accounts. The company also provides various loans, such as multi-family and nonresidential real estate mortgage loans, commercial term loans and lines of credit, one- to four-family residential mortgage loans, and home equity loans and lines of credit; loans to individuals, builders, or developers for the construction of multi-family residential buildings or commercial real estate, or for the construction or renovation of one- to four-family residences; overdraft lines of credit; and personal loans. In addition, it engages in the investment activities. Kearny Financial Corp. was founded in 1884 and is headquartered in Fairfield, New Jersey.