TC Bancshares (NASDAQ:TCBC) and Capitol Federal Financial (NASDAQ:CFFN) Critical Comparison

Capitol Federal Financial (NASDAQ:CFFN) and TC Bancshares (NASDAQ:TCBC) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.

Dividends

Capitol Federal Financial pays an annual dividend of $0.34 per share and has a dividend yield of 5.7%. TC Bancshares pays an annual dividend of $0.10 per share and has a dividend yield of 0.7%. Capitol Federal Financial pays out -36.2% of its earnings in the form of a dividend. TC Bancshares pays out 166.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capitol Federal Financial is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Capitol Federal Financial and TC Bancshares, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Capitol Federal Financial	0	1	0	0	2.00
TC Bancshares	0	0	0	0	N/A

Capitol Federal Financial presently has a consensus target price of $5.00, suggesting a potential downside of 16.11%. Given Capitol Federal Financial’s higher probable upside, equities research analysts clearly believe Capitol Federal Financial is more favorable than TC Bancshares.

Institutional and Insider Ownership

88.5% of Capitol Federal Financial shares are owned by institutional investors. Comparatively, 23.6% of TC Bancshares shares are owned by institutional investors. 2.2% of Capitol Federal Financial shares are owned by company insiders. Comparatively, 6.9% of TC Bancshares shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Capitol Federal Financial and TC Bancshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Capitol Federal Financial	-34.17%	3.85%	0.40%
TC Bancshares	1.21%	0.32%	0.06%

Volatility and Risk

Capitol Federal Financial has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500. Comparatively, TC Bancshares has a beta of 0.05, meaning that its share price is 95% less volatile than the S&P 500.

Valuation and Earnings

This table compares Capitol Federal Financial and TC Bancshares’ top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Capitol Federal Financial	$380.96 million	2.09	-$101.66 million	($0.94)	-6.34
TC Bancshares	$21.97 million	2.70	$270,000.00	$0.06	229.17

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

Summary

Capitol Federal Financial beats TC Bancshares on 8 of the 14 factors compared between the two stocks.

About Capitol Federal Financial

Capitol Federal Financial, Inc. operates as the holding company for Capitol Federal Savings Bank that provides various retail banking products and services in the United States. The company accepts a range of deposit products, including savings accounts, money market accounts, interest-bearing and non-interest-bearing checking accounts, and certificates of deposit. It also provides various loan products, such as one- to four-family residential real estate loans, commercial real estate, commercial and industrial, construction loans, and small business loans, as well as consumer loans, which include home equity loans and lines of credit, home improvement loans, vehicle loans, and loans secured by savings deposits. In addition, the company offers mobile, telephone, and online banking services, as well as bill payment services; credit cards; mortgage loan; operates a call center; and invests in various securities. The company serves the metropolitan areas of Topeka, Wichita, Lawrence, Manhattan, Emporia, and Salina, Kansas, and a portion of the metropolitan area of greater Kansas City. Capitol Federal Financial, Inc. was founded in 1893 and is headquartered in Topeka, Kansas.

About TC Bancshares

TC Bancshares, Inc. operates as the holding company for TC Federal Bank that provides various banking services for individual and commercial customers in the United States. It accepts various deposit products, including personal checking accounts, business checking accounts, savings accounts, money market accounts, and certificates of deposit. The company also offers lending products comprising single-family residential loans, home equity lines of credit, closed-end home equity loans, consumer loans, commercial and multi-family residential real estate loans, commercial and industrial loans, construction loans, land development loans, and SBA/USDA guaranteed loans. It operates branches in Thomasville, Georgia and Tallahassee, Florida, as well as loan production offices in Savannah, Georgia, and Jacksonville, Florida. The company was founded in 1934 and is based in Thomasville, Georgia.