Analyzing Security Federal (OTCMKTS:SFDL) and Seacoast Banking Corporation of Florida (NASDAQ:SBCF)

Seacoast Banking Corporation of Florida (NASDAQ:SBCF) and Security Federal (OTCMKTS:SFDL) are both finance companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Profitability

This table compares Seacoast Banking Corporation of Florida and Security Federal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Seacoast Banking Corporation of Florida	16.93%	7.16%	1.02%
Security Federal	14.29%	12.27%	0.80%

Dividends

Seacoast Banking Corporation of Florida pays an annual dividend of $0.76 per share and has a dividend yield of 2.4%. Security Federal pays an annual dividend of $0.60 per share and has a dividend yield of 1.9%. Seacoast Banking Corporation of Florida pays out 45.0% of its earnings in the form of a dividend. Security Federal pays out 17.1% 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. Seacoast Banking Corporation of Florida has raised its dividend for 4 consecutive years. Seacoast Banking Corporation of Florida is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

81.8% of Seacoast Banking Corporation of Florida shares are owned by institutional investors. 1.6% of Seacoast Banking Corporation of Florida shares are owned by company insiders. Comparatively, 36.4% of Security Federal shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

Seacoast Banking Corporation of Florida has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500. Comparatively, Security Federal has a beta of 0.56, meaning that its stock price is 44% less volatile than the S&P 500.

Earnings & Valuation

This table compares Seacoast Banking Corporation of Florida and Security Federal”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Seacoast Banking Corporation of Florida	$582.24 million	5.24	$120.99 million	$1.69	18.46
Security Federal	$87.55 million	1.12	$9.81 million	$3.51	8.95

Seacoast Banking Corporation of Florida has higher revenue and earnings than Security Federal. Security Federal is trading at a lower price-to-earnings ratio than Seacoast Banking Corporation of Florida, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Seacoast Banking Corporation of Florida and Security Federal, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Seacoast Banking Corporation of Florida	0	4	2	1	2.57
Security Federal	0	0	0	0	0.00

Seacoast Banking Corporation of Florida presently has a consensus target price of $31.50, suggesting a potential upside of 0.96%. Given Seacoast Banking Corporation of Florida’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Seacoast Banking Corporation of Florida is more favorable than Security Federal.

Summary

Seacoast Banking Corporation of Florida beats Security Federal on 14 of the 18 factors compared between the two stocks.

About Seacoast Banking Corporation of Florida

Seacoast Banking Corp. of Florida is a financial holding company, which engages in the provision of integrated financial services. It provides banking and investment services to businesses and consumers, including personal and business deposit products, Internet and mobile banking, personal, commercial and mortgage loans, wealth management services, and treasury management solutions. The company was founded in 1983 and is headquartered in Stuart, FL.

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.