Head to Head Comparison: Provident Financial Services (NYSE:PFS) versus Sturgis Bancorp (OTCMKTS:STBI)

Sturgis Bancorp (OTCMKTS:STBI) and Provident Financial Services (NYSE:PFS) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, profitability, valuation and risk.

Institutional & Insider Ownership

72.0% of Provident Financial Services shares are held by institutional investors. 16.0% of Sturgis Bancorp shares are held by company insiders. Comparatively, 3.0% of Provident Financial Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Sturgis Bancorp pays an annual dividend of $0.72 per share and has a dividend yield of 2.8%. Provident Financial Services pays an annual dividend of $0.96 per share and has a dividend yield of 4.2%. Sturgis Bancorp pays out 19.7% of its earnings in the form of a dividend. Provident Financial Services pays out 40.9% 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.

Profitability

This table compares Sturgis Bancorp and Provident Financial Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sturgis Bancorp	13.20%	N/A	N/A
Provident Financial Services	21.95%	10.98%	1.23%

Earnings and Valuation

This table compares Sturgis Bancorp and Provident Financial Services”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sturgis Bancorp	$59.13 million	0.95	$7.46 million	$3.66	7.06
Provident Financial Services	$1.38 billion	2.13	$291.16 million	$2.35	9.63

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

Volatility & Risk

Sturgis Bancorp has a beta of 0.17, suggesting that its stock price is 83% less volatile than the S&P 500. Comparatively, Provident Financial Services has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Sturgis Bancorp and Provident Financial Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sturgis Bancorp	0	0	0	0	0.00
Provident Financial Services	0	3	3	2	2.88

Provident Financial Services has a consensus price target of $23.93, suggesting a potential upside of 5.72%. Given Provident Financial Services’ stronger consensus rating and higher probable upside, analysts plainly believe Provident Financial Services is more favorable than Sturgis Bancorp.

Summary

Provident Financial Services beats Sturgis Bancorp on 14 of the 17 factors compared between the two stocks.

About Sturgis Bancorp

Sturgis Bancorp, Inc. operates as the bank holding company for Sturgis Bank & Trust Company that provides banking products and services in Michigan, the United States. The company offers checking, savings and health savings, and money market accounts; and certificates of deposit and individual retirement accounts. It also provides mortgage, automobile, savings secured, personal, home equity, equipment and machinery, government supported, and commercial real estate loans, as well as home equity lines of credit and business lines of credit; and credit cards. In addition, the company offers private banking, cashier checks, wire transfers, foreign drafts and foreign currency, overdraft protection, night depository, and notary services, as well as safe deposit boxes and residential mortgages. Further, it provides direct deposit, remote deposit capture, Visa check card, and checks reorder services; and investment and financial-advisory services, as well as commercial and consumer insurance and title insurance products. Additionally, the company offers estate and asset management services, such as estate settlements, trust administration, record keeping, investment management, and custody services; cash and treasury management; and online and mobile banking, bill pay, and mobile wallet services. It operates through 14 bank facilities and 4 full service standalone ATMs located in 12 communities in Michigan. Sturgis Bancorp, Inc. was founded in 1905 and is headquartered in Sturgis, Michigan.

About Provident Financial Services

Provident Financial Services, Inc. operates as the bank holding company for Provident Bank that provides various banking products and services to individuals, families, and businesses in the United States. Its deposit products include savings, checking, interest-bearing checking, money market deposit, and certificate of deposit accounts, as well as IRA products. The company's loan portfolio comprises commercial real estate loans that are secured by properties, such as multi-family apartment buildings, office buildings, retail and industrial properties, and office buildings; commercial business loans; fixed-rate and adjustable-rate mortgage loans collateralized by one- to four-family residential real estate properties; commercial construction loans; and consumer loans consisting of home equity loans, home equity lines of credit, personal loans and unsecured lines of credit, and auto and recreational vehicle loans. It also offers cash management, remote deposit capture, payroll origination, escrow account management, and online and mobile banking services; and business credit cards. In addition, the company provides wealth management services comprising investment management, trust and estate administration, financial planning, and tax compliance and planning. Further, it sells insurance and investment products, including annuities; operates as a real estate investment trust for acquiring mortgage loans and other real estate related assets; and manages and sells real estate properties acquired through foreclosure. The company was founded in 1839 and is headquartered in Jersey City, New Jersey.