Reviewing SR Bancorp (NASDAQ:SRBK) and Eastern Bankshares (NASDAQ:EBC)

SR Bancorp (NASDAQ:SRBK) and Eastern Bankshares (NASDAQ:EBC) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.

Volatility & Risk

SR Bancorp has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Eastern Bankshares has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Institutional and Insider Ownership

24.7% of SR Bancorp shares are held by institutional investors. Comparatively, 71.7% of Eastern Bankshares shares are held by institutional investors. 7.8% of SR Bancorp shares are held by insiders. Comparatively, 1.3% of Eastern Bankshares shares are held 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.

Analyst Recommendations

This is a summary of recent recommendations and price targets for SR Bancorp and Eastern Bankshares, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SR Bancorp	0	1	1	0	2.50
Eastern Bankshares	0	3	4	1	2.75

SR Bancorp currently has a consensus price target of $19.00, indicating a potential upside of 3.26%. Eastern Bankshares has a consensus price target of $22.70, indicating a potential upside of 13.96%. Given Eastern Bankshares’ stronger consensus rating and higher possible upside, analysts plainly believe Eastern Bankshares is more favorable than SR Bancorp.

Valuation & Earnings

This table compares SR Bancorp and Eastern Bankshares”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SR Bancorp	$48.54 million	3.16	$5.14 million	$0.42	43.81
Eastern Bankshares	$1.33 billion	3.52	$88.22 million	$1.78	11.19

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

Dividends

SR Bancorp pays an annual dividend of $0.20 per share and has a dividend yield of 1.1%. Eastern Bankshares pays an annual dividend of $0.52 per share and has a dividend yield of 2.6%. SR Bancorp pays out 47.6% of its earnings in the form of a dividend. Eastern Bankshares pays out 29.2% 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. Eastern Bankshares has increased its dividend for 5 consecutive years. Eastern Bankshares is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares SR Bancorp and Eastern Bankshares’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SR Bancorp	6.39%	1.40%	0.24%
Eastern Bankshares	26.28%	8.60%	1.25%

Summary

Eastern Bankshares beats SR Bancorp on 16 of the 18 factors compared between the two stocks.

About SR Bancorp

SR Bancorp, Inc. operates as the holding company for Somerset Regal Bank that provides customary retail and commercial banking services to individuals, businesses, and local municipalities in the communities of Somerset, Middlesex, Hunterdon, and Essex counties in New Jersey. It offers deposit instruments, including noninterest-bearing demand deposits, interest-bearing demand accounts, savings accounts, money market accounts, and certificates of deposit. The company also provides loans comprising one- to four family-residential mortgage loans, home equity loans and lines of credit, unsecured personal loans, and rehabilitation loans; and bill payment services. In addition, it is involved in the investment activities. The company was founded in 1887 and is headquartered in Bound Brook, New Jersey.

About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. The company provides deposit accounts, interest checking accounts, money market accounts, savings accounts, and time certificates of deposit accounts. It also offers commercial and industrial, commercial real estate and construction, small business, residential real estate, and home equity loans; lines of credit; and other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides trust, financial planning and portfolio management, automated lock box collection, cash management, and account reconciliation services; personal, business, and employee benefits insurance products. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.